Google's Q3 beats as ad volume grows, stock flirts $1,000 level
By Alexei Oreskovic
SAN FRANCISCO (Reuters) - Google Inc's quarterly results beat Wall Street's expectations as the Internet search giant expanded its mobile and overseas businesses while keeping ad-rate declines in check, sending its shares to a record high.
The market reaction put Google's stock within striking distance of $1,000, following what analysts said was a strong, but not spectacular quarter.
Shares of the world's No.1 Internet search engine jumped 8 percent to $959.65 in after-hours trading on Thursday, after it reported a 23 percent rise in revenue from its Internet business, excluding fees paid to partners, of $10.8 billion in the third quarter.
"Expectations going into earnings were a little muted," said Needham & Co analyst Kerry Rice. "They did what they needed to do to impress investors."
Google's business, like rivals Facebook Inc and Yahoo Inc, has come under pressure as more consumers access its online services on mobile devices such as smartphones and tablets, where advertising rates are lower than on PCs.
The average cost-per-click - the price that marketers pay Google when consumers click on their ads - decreased 8 percent during the third quarter, deepening the 6 percent price erosion that Google experienced in the second quarter.
But the total amount of paid clicks increased 26 percent year-on-year during the three months ended September 30, the highest rate of growth in one year.
"That's the key story, their ad volume growth is outpacing the decline in cost-per-clicks," said JMP Securities analyst Ronald Josey. Continued...