Google earnings top estimates, sending shares sharply higher
Google Inc., owner of the world’s largest Internet search engine, reported sales and profit that topped analysts’ estimates, a sign the company is benefiting from an effort to expand into mobile and display advertising.
Second-quarter sales rose to $6.92 billion, Mountain View, Calif.- based Google said Thursday. That topped $6.57 billion, the average estimate of analysts surveyed by Bloomberg. Net income climbed 36 percent to $2.51 billion, or $7.68 a share, from $1.84 billion, or $5.71, a year earlier.
Chief Executive Larry Page, who succeeded Eric Schmidt in April, is using ads on mobile devices and the YouTube video site to lessen Google’s dependence on traditional Internet search. The company will command 41 percent of the U.S. online advertising market this year, up from 39 percent in 2010, according to EMarketer Inc., a New York-based researcher.
“For a long time, I think it was fair to knock the company as a one-trick pony, but I don’t think that’s the case anymore,” said Clayton Moran, an analyst at Benchmark Co. in Boca Raton, Fla., who rates the stock a “buy” and doesn’t own it. “Display is a success at this point. And I think mobile is a success -- and has even great potential going forward.”
Google shares rose as much as 11 percent in late trading after closing earlier down $9.32 to $528.94.
Page is investing in new businesses to help Google compete with newer Internet rivals such as Facebook Inc., the world’s most popular social-networking service. Online users spent an average of 6.7 hours on Facebook in June, compared with 4.1 hours on Google, according to ComScore Inc.
In a drive to lure Web surfers eager to socialize online, the company rolled out Google+, a service that compares to Facebook, yet aims to let users more easily set up groups of friends and contacts. Within days of its debut, Google temporarily shut the invite mechanism for Google+ following “insane demand,” Vic Gundotra, head of social efforts, said at the time.