Google shares at an all-time high

Surge in mobile and video advertising help drive quarterly revenue higher

Google’s  shares rose 13 per cent to $1007.40 after the opening bell on the Nasdaq. Photograph: Chris Helgren/Reuters/Files

Google’s shares rose 13 per cent to $1007.40 after the opening bell on the Nasdaq. Photograph: Chris Helgren/Reuters/Files

 

Shares in Google jumped to an all-time high above $1000 today after the search engine giant reported a surge in mobile and video advertising that helped drive quarterly revenue up 23 per cent.

The shares rose 13 per cent to $1007.40 after the opening bell on the Nasdaq, before easing back a few dollars.

Google’s business, like rivals Facebook and Yahoo, has come under pressure as more consumers access its online services on mobile devices such as smartphones and tablets, where advertising rates are lower than on PCs.

The average cost-per-click - the price that marketers pay Google when consumers click on their ads - decreased 8 per cent during the third quarter, deepening the 6 per cent price erosion that Google experienced in the second quarter.

But the total amount of paid clicks increased 26 per cent year-on-year during the three months ended September 30th, the highest rate of growth in one year.

“That’s the key story, their ad volume growth is outpacing the decline in cost-per-clicks,” said JMP Securities analyst Ronald Josey.

Roughly 40 per cent of the traffic to YouTube, the Google-owned video website, now occurs on mobile devices, Google chief executive Larry Page said yesterday. Two years ago, only 6 per cent of YouTube’s traffic occurred on mobile devices.

“Google’s done a good job of being in the right place in mobile as it grows, and being able to monetise that,” said Mr Rice.

He also pointed to Google’s 28 per cent revenue growth outside of the US and Britain as further signs of Google’s strength.

Google’s results offered a sharp contrast to online rival Yahoo, which reported a slight dip in quarterly revenue on Tuesday and lowered its financial outlook.

Yesterday, co-founder and CEO Mr Page told analysts he will no longer be joining the company’s quarterly earnings conference calls on a regular basis.

“I know you all would love to have me on, but you’re also depending on me to ruthlessly prioritise my time for the benefit of the business,” Mr Page said, without providing further explanation for the change.

Mr Page, who with Sergey Brin conceived of what is today the world’s most-used internet search engine, is not known for assiduously courting Wall Street investors. And this year, Mr Page revealed that his vocal cords are partially paralysed as the result of a rare medical condition.

Needham & Co’s Mr Rice said he did not expect Mr Page to be any less involved in running the company, noting that Amazon.com’s CEO Jeff Bezos does not participate in the quarterly earnings calls.

Google executives also provided few details on the recently-launched MotoX smartphone, the flagship device within Google’s Motorola mobile phone business.

Operating losses at Motorola were $248 million during the third quarter, compared to a loss of $192 million in the third quarter of 2012.

Google’s consolidated business earned $2.97 billion, or $8.75 per share in the three months ended Sept. 30, compared to $2.18 billion, or $6.53 per share, last year.

Excluding certain items, Google said it earned $10.74 per share, compared to the $10.34 that analysts were expecting, according to Thomson Reuters.

Consolidated revenue of $14.89 billion compared with the $14.79 billion average analyst estimate. (Reuters)