[fogetti]

I think you are conflating the seller and buyer side. In Google's case the CPC is actually a revenue and they do not see it as cost as the marketers you described. So from marketers' POV, yes, conversion makes more sense. From Google's POV they couldn't care less I think.

And the important thing is the trend, not the actually quarterly numbers anyway. Which I assume would be the same even if we took a look at the conversions.

[asdfasgasdgasdg]

Google absolutely cares about conversions. Customers that don't see conversions will eventually stop doing business. Iirc in the early days of google analytics one of the much touted features was the ability to connect google ad clicks to the conversion funnel.

[Gustomaximus]

Also Google cares about conversions because if they can get people tracking down funnel they can better optimise to get to to pay more for less impressions/clicks, and the now unused space can be sold elsewhere. When done right it's win/win.

[summerlight]

For the target CPA products (which is now the major driver), CPC depends on conversions volume generated by ads. So Google won't make more money even if some changes lead to more clicks but not conversions since the actual bid on clicks will be generally lower on low value clicks.