(Adds analyst comment, updates shares)
BOSTON, April 20 (Reuters) - Shares of Web search leader Google Inc. (GOOG.O) rose 3.5 percent on Friday, a day after its quarterly results beat Wall Street expectations and brokerages raised their price targets for the stock.
The company said on Thursday that its profits exceeded forecasts as market share gains and a lower tax rate boosted the bottom line.
Google shares jumped $16.34 to $487.99 in heavy morning Nasdaq trade after several leading investment firms raised their forecasts.
Merrill Lynch raised its target on Google shares to $590 from $560. Banc of America raised its price target to $620 from $601, and Lehman Brothers raised its target to $610 from $560. “Long-term investors should feel comfortable adding to positions at current levels,” RBC analyst Jordan Rohan said in a note to clients. Rohan raised his price target on the share to $560 and maintained an “outperform” rating.
Google is the world leader in pay-per-click advertising that runs alongside search results on its own sites and affiliated Web sites that serve as advertising partners.
It derives roughly 99 percent of its revenue from such text ads, although it is moving quickly to expand into markets for online video, Web display, television, radio and print advertising.
“We believe Google will continue to take share in an attractive market and the company’s technology strengths will lead to new opportunities in traditional media, payment processing and on-demand software,” Merrill Lynch said in a Friday morning note to its clients.
The company said late Thursday it had first-quarter profit of $3.68 a share, excluding stock-option costs, on revenue of $3.66 billion.
Wall Street had expected a profit of $3.31 a share on revenue of $3.57 billion, according to Reuters Estimates.
((Reporting by Jim Finkle, editing by Gerald E. McCormick; email@example.com, Reuters messaging: firstname.lastname@example.org, + 1 617 367 4164)) Keywords: GOOGLE SHARES/
C Reuters 2007. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nN20254282