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He also suggested that Google may have made an error by encouraging businesses to build mobile optimized sites, because phones now are so sophisticated they may not need them.
For the last three quarters, investors have worried about the effect of mobile ads on Google's revenue. Generally, ads on mobile platforms are cheaper than ads on desktop platforms, but the core of Google's business is still on desktop. That may not last much longer ? more and more users are experiencing Google foremost on their phones.
Google admitted in December that mobile phones are causing a "deceleration" in its desktop business. Only 73 percent of Google's clicks come from desktops.
Page was asked about that issue again yesterday on his Q4 2012 earnings call. He told Wall Street that he expected the imbalance to tip one way over the other, ultimately in mobile's favor, but that revenues would nonetheless go up:
Richard Kramer - Arete Research: Thanks very much. Larry, a couple of quick questions. First of all, just to polish up this Mobile and CPC?[cost-per-click prices] question, how many years do you think it's going to take before CPCs on Mobile and Desktop are roughly equal trading off location and display size?
Larry Page - Chief Executive Officer, Director: ?? I am not going to make predictions about when they will be equal; I don't think they will be equal, I think probably one will always be bigger than the other, though, not clear which way but I don't think this is a long-term problem. I don't think this is a long time in coming, and I think as I have said before, there's a lot of advantages to mobile.
You already know location quite clearly, you can call somebody easily, you have a camera, you can hangout with the business, you can be notified instantly. There's just a lot of things about mobile that are amazing opportunities for advertisers and for businesses. So I expect that to revolutionize how people do marketing and we are working hard on that. I expect that that will work a lot better for users and for advertisers and businesses, and therefore more money. We will be able to generate a lot more money than we do now.
At another point, he said:
I think that CPCs will improve as these devices are improving as well.
On the call, chief business officer Nikesh Arora also said that the device platform on which Google appears is less relevant than it was because advertisers don't really care which medium their ads appear in as long as they reach users at the right time.
That wasn't the only time Page focused on mobile on the call. Earlier, he was asked about Google's progress in persuading web publishers to create mobile-optimized versions of their web sites that are easier for phones to read. Google has spent more than a year on that effort, but Page indicated it may ultimately be a waste because phones are now as good as laptops at handling web sites:
Page: I think that in some sense, some of you may consider mobile an extension over the desktop usage too. I mean, we have built a lot of great products that people use for the desktops like Maps which was transferred very well. And I think that one thing I was amazed by Chrome on my Android phone, Chrome is just an amazing experience. So, using my Nexus phone or other more smartphones from the latest generation, those phones are almost like using a desktop of last year or something like that.
... I'll just add on the mobile question. We don?t necessarily want them to have mobile sites some are too simple and I find I get kind of frustrated on my phone sometimes when I have these mobile specific sites because I am using a modern Nexus 4 that can actually view up the full site and I just find it confusing.
If he's right, it suggests that ultimately the mobile v. desktop CPC issue will disappear in favor of the aggregate issue of supply and demand. If Google serves more impressions across all devices, the increase in inventory supply will continue to drive down CPC prices but drive up paid clicks.
Judging by Google's own numbers ? that's exactly what's happening now.
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