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Google (Nasdaq: GOOG) announced its third-quarter
earnings yesterday, and its better-than-expected results sent the stock
soaring early Friday.
The search-engine behemoth reported revenues of nearly $10 billion for
the quarter ended September 30 in an earnings announcement yesterday. The
33 percent increase compared to last year’s third quarter was well ahead
of market estimates. Google CEO Larry Page said one encouraging sign of
the company’s third-quarter success was its sales of Google+, the new
social networking and online sharing platform that debuted in mid-June.
According to Page, Google+ already has more than 40 million users.
“We had a great quarter,” he said in a press release. “People are
flocking into Google+ at an incredible rate and we are just getting
started.”
News
of Google’s killer earnings spurred a massive rally on the stock
market. The Dow Jones Industrial Average rallied 86 points to 11564 by
12:41 p.m. Friday after falling 41 points on Thursday. Shares of Google
stock were up nearly 6 percent, taking it to nearly 600 points – heights
the stock hadn’t seen since early August.
Google stock may not stop there. In a conference call on Thursday, Page
said the company’s mobile advertising revenues, through its Android-based
smartphones, are running at an annual rate of $2.5 billion. That’s 2.5
times the revenue its advertising was generating a year ago – a sign that
Google is benefitting greatly from the mobile advertising boom.
There were other good signs in Google’s earnings announcement. Google
Maps was launched in 40 new countries in August, upping the total to 130
countries. Google Chrome, its new high-tech web browser that helps users
navigate the web quicker, is now used by more than 200 million people and
is “still growing,” Page said.
That bodes well for Google stock’s future. Jefferies projects that Google
stock could go as high as $850. Thomson Reuters StarMine data said that
13 analysts rate Google a “strong buy” and 20 others rate the stock a
“buy.”
The Android is already the most used smartphone device in the world, and
Google’s recent
deal with Motorola Mobility means it will soon be expanding its
mobile presence. The Motorola deal will give Google the hardware
manufacturing capabilities to develop its own line of smartphones.
So the company’s online presence — and, consequently, its earnings — is
likely to expand even further. That could make Google’s fourth-quarter
earnings rise even further than they did in Google’s epic third quarter.