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Google Stock Shrugs Off Cut In Mobile App Store Developer Fees

Alphabet‘s (GOOGL) Google on Thursday cut fees in half for mobile app developers, sending up shares in online dating firms Match Group (MTCH) and Bumble (BMBL). Google stock edged up a fraction, as the move was expected. But Match stock and Bumble stock soared.

In a blog, Google said service fees at its Play Store would drop to 15% from 30% in the first year. It said some app developers may qualify for fees of only 10%.

Google stock edged up a fraction to 2,837.72 on the stock market today. Match stock popped 10.3% to 175.53. Bumble stock advanced 7.5% to 56.26.

Apple (AAPL) recently made it easier for more app developers to qualify for lowered fees. The move came amid regulatory pressure and lawsuits.

Games are the cash cow for both Google stock and Apple. Developers have given Apple and Google a 30% cut of subscriptions for the first 12 months.

Bank of America in a recent report said Google generated $11.2 billion in revenue from its mobile app store in 2019. It garnered $8.5 billion in gross profit, BofA said. It estimated Google Play store revenue — assuming a 30% fee rate — at $16.3 billion in 2021.

Google Stock: Earnings Due Oct. 26

Raymond James, in a note published in September, said a 50% cut in Google’s fees would result in a $6.5 billion reduction in gross fiscal 2022 profits.

Google reports third-quarter earnings on Oct. 26. Analysts project 45% EPS growth to $23.72 amid a rebound in advertising.

According to IBD MarketSmith analysis, Google stock trades about 4% below a flat-base entry point of 2,925.17. Shares have advanced 61% in 2021.

If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines.

IBD offers a broad range of growth stock lists, such as Leaderboard. Investors also can create watchlists for issues like Google stock, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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