Google stock hits new high as mobile bets pay off

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

At least 16 brokerages raised their price targets on the stock to between $880 and $1,220, with Deutsche Bank bumping up its target price by 26 percent.

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

Google said paid clicks increased by a quarter in the three months ended September 30, from a year earlier, the highest rate of growth in the past year.

This offset an 8 percent fall in average cost-per-click, the price advertisers pay Google when consumers click on their ads.

“We view solid paid clicks growth to be a good indicator of demand, driven by the continued shift to mobile,” J.P. Morgan analysts said. They had expected 21.5 percent growth.

In contrast, analysts say Yahoo, which this week reported a tepid quarter, has lost market share in display and search advertising in the face of strong competition from Facebook Inc and Google.

Google shares have climbed 38 percent this year, rewarding investors such as Fidelity Investments’ $101 billion Contrafund.

Contrafund added to its stake in Google in the third quarter and got a big lift from the surging performance of Facebook and Tesla Motors Inc as well. The fund, managed by star stock picker Will Danoff, returned 8.94 percent in the third quarter, easily beating the 5.24 percent advance of the S&P 500 Index.

Facebook is expected to report its third-quarter results on October 30.

To counter declines in cost-per-click rates, Google rolled out in February a service to help advertisers market through a mix of smartphones, tablets and desktops.

The J.P. Morgan analysts said this drive was a major opportunity for Google in the upcoming holiday season.

Analysts also highlighted Google’s ability to generate revenue from its video-streaming website, YouTube.

YouTube branded video-ads grew more than 75 percent in the quarter, from a year earlier, with 40 percent of traffic now coming from mobile devices.

“We estimate that Google’s key YouTube asset generated approximately $4 billion in revenue in 2012, positioning Google extremely well for the strong growth in video advertising,” RBC Capital Markets analysts wrote in a note.

Analysts at Jefferies said Google is best positioned to benefit in mobile with one billion Android activations. The company sells applications and content through its Google Play Store.

The Mountain View, California-based company – known for its Google Maps service, Chrome browser and Nexus line of smartphones and tablets – reported a 32 percent jump in revenue from the rest of world (excluding UK) during the quarter with growth coming from Japan, South Korea and Australia.

” is an encouraging bright spot. Google should be a good play off any European and Emerging Markets recovery,” analysts at RBC Capital markets said.

“We think the worst is behind Google from a sentiment perspective,” Deutsche Bank analysts said.

source: interaksyon.com

Google’s Schmidt to sell roughly 42 percent of stake

SAN FRANCISCO — Google Inc Executive Chairman Eric Schmidt is selling roughly 42 percent of his stake in the Internet search company, a move that could potentially net the former chief executive a $2.51 billion windfall.

Schmidt, 57, will sell 3.2 million shares of Class A common stock through a stock trading plan, Google said in a filing with the U.S. Securities and Exchange Commission on Friday.

The plan, which Google said would give Schmidt “individual asset diversification and liquidity,” allows Schmidt to spread trades out over a period of one year to reduce the market impact.

Shares of Google were down $4.11 at $781.26 in after-hours trading on Friday.GOogle Stock

A Google spokeswoman would not comment on why Schmidt is selling the shares at this time.

Wedbush Securities analyst James Dix said Schmidt’s stock sales did not worry him or signal a loss of confidence in the company by Schmidt.

“I’d be more worried if the current CEO or CFO sold a lot of their stake,” said Dix.

Schmidt, who served as Google’s chief executive until 2011, currently owns roughly 7.6 million shares of Class A and Class B common stock. The shares represent 2.3 percent of Google’s outstanding stock and roughly 8.2 percent of the voting power of Google’s stock.

The fact that Schmidt will still own a significant amount of shares after the sales means he’ll have a good deal of “skin in the Google game,” said Needham & Co analyst Kerry Rice. But he said it could hint at Schmidt playing a less central role within the company going forward.

“My speculation is that Eric’s relationship with Google is evolving,” said Rice. “I would assume that as he decides he wants to diversify away from Google – both his career and financially – he’s got ideas of what he would like to do with some of his funds.”

Schmidt, who helped turn Google into the world’s No.1 search engine during his decade as CEO, handed the reins to Google co-founder Larry Page in April 2011.

As executive chairman, Schmidt has been particularly involved in government relations, taking a leading role in the company’s discussions with antitrust regulators in the United States and the European Union. The U.S. Federal Trade Commission ended its investigation into Google last month without any action. Google has offered to change some of its business practices to appease European competition regulators.

“As Google moves to maybe more tactical battles, as opposed to the strategic battles it’s been waging with the government, once those are concluded, maybe his role can be lessened,” said Needham & Co’s Rice.

Schmidt has also made headlines apart from Google. In January, Schmidt traveled to North Korea with former New Mexico Governor Bill Richardson for a “personal” trip. The trip was criticized by the U.S. State Department as ill-timed – coming weeks after North Korea conducted a rocket launch in violation of U.N. Security Council sanctions.

Shares of Google are trading at all-time highs, finishing Friday’s regular session at a record closing price of $785.37. At that price, Schmidt’s share sales would be worth $2.51 billion.

Google said that Schmidt entered into the stock trading plan in November
Schmidt was ranked 138 on the Forbes list of global billionaires with a net worth of $6.9 billion in March 2012.

Given Schmidt’s changed role at the company and the amount of his wealth tied up in Google’s stock, it was not unreasonable for him to diversify his holdings, said Wedbush Securities analyst Dix.

“As good as Google stock is, it isn’t as good as cash if you actually want to buy something,” he said.

source: interaksyon.com