Google shares rise amid mobile product expectations
NEW YORK (Reuters) - Shares of Google Inc (GOOG.O) rose 1.5 percent on Monday ahead of its expected announcement of an operating system for mobile phones that sources said had the support of more than 25 companies.
Google stock, which had already risen more than 5 percent the week before, was up $10.67 at $721.92 on Nasdaq following reports that later on Monday it would unveil a system aimed at expanding its desktop computer dominance of Web search to mobile devices.
William Blair & Co analyst Troy Mastin said a mobile product announcement was highly anticipated by investors after months of speculation about a Google phone.
He said the development might hurt profits in the short term, but should be a positive growth driver for the long term.
"It could actually be a bit of a drag in 2008 on their profitability as they are clearly spending money on this development," Mastin said.
"I think it could be very significant longer term," he said. "I'm not sure if that's by 2009 or 2010, but I think the mobile Internet and advertising related revenue growth from the mobile Internet is pretty significant."
Sources told Reuters on Friday that Google had developed a mobile operating system based on open-source Linux code, which will support applications from different software developers in addition to the company's own e-mail, search and mapping services.
Supporters include Sprint Nextel Corp (S.N), Deutsche Telekom's (DTEGn.DE) T-Mobile USA, Motorola Inc MOT.N and Samsung Electronics (005930.KS), the sources said.
(Reporting by Sinead Carew)
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