The stakes may be obvious for Hewlett Packard, Microsoft and Intel, which made the hardware, software and chips that powered so many personal computers. Perhaps more surprising is how Wall Street also is punishing two newer companies, Google and Facebook, whose products many consumers consider essential to their mobile experiences.
The problem for these companies is that they rely on online advertising for a huge share of their revenue. Although online advertising is tremendously lucrative when users of personal computers are the targets, that’s not yet true for mobile devices, which have smaller screens and don’t have the same track record of converting pitches to sales — especially when it comes to big-ticket items.
It’s the riddle many in the tech industry are desperate to solve.
“Here’s the scary thing: It’s not being disrupted by a lucrative new business. It’s being disrupted by a social reality,” Gartner tech analyst Whit Andrews said. “There’s not a big business yet in mobile advertising and mobile moneymaking. This is what scares people.”
One sign of the upheaval could be heard from Google chief executive Larry Page on Thursday, hours after a technical glitch caused the company’s disappointing earnings report to get posted ahead of schedule. He acknowledged the mixup with a quick apology but spent far more time on a subject he clearly regarded as more important: the company’s prospects for managing the mobile disruption.
Page focused on the promising number — Google’s revenue from mobile products was on its way to more than tripling for the year, to $8 billion — and played down the worrisome news that the money advertisers had paid per click was off by 15 percent compared with a year earlier. Driving this shift was the increasing share of ads appearing on the tiny screens of mobile devices instead of personal computers.
“We’re uniquely positioned to get through that transition and really profit from it,” Page said.
Investors saw it differently, driving Google’s stock down by 8 percent. It was down again Friday. So was Microsoft’s, which had its own disappointing earnings report Thursday. So was Intel’s. So was Hewlett Packard’s. Facebook was up modestly Friday but has fallen by half since its initial public offering in May.
Americans used 114 million smartphones in August, up from 101 million in the beginning of the year, according to comScore, which tracks the industry. The percentage of Web pages viewed from mobile devices reached 13 percent, up from 7 percent a year earlier. Worldwide shipments of personal computers, meanwhile, fell 8.6 percent in the third quarter compared with 2011, according to research firm International Data.