Oct 18 Google Inc shares were set to
open at an all-time high near $1,000 after the search engine
giant reported a surge in mobile and video advertising that
helped drive quarterly revenue up 23 percent.
At least 10 brokerages raised their price targets on the
stock to between $880 and $1,175, with Jefferies bumping up its
target price the most at 15 percent.
Google said paid clicks increased 26 percent in the three
months ended Sept. 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
Facebook is expected to report its third-quarter results on
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.
Google, which is also known for its Google Maps service and
Chrome browser, reported a 32 percent jump in international
revenue during the quarter.
"[Rest Of World revenue] is an encouraging bright spot.
Google should be a good play off any European and Emerging
Markets recovery," analysts at RBC Capital markets said.
Google shares were trading up 9 percent at $970 before the
bell on Friday.
(Reporting by Soham Chatterjee; Editing by Sriraj Kalluvila)