Google jumps as investors cheer mobile growth
By Alexei Oreskovic
SAN FRANCISCO (Reuters) - Google Inc's free Android smartphone software, already a big hit with consumers, is starting to win the hearts of investors.
The world's No. 1 Internet search company offered a peek at its mobile business during quarterly results on Thursday, revealing that the business was generating revenue at an annual run rate of $2.5 billion, up from $1 billion last year.
That helped Google sail past third-quarter financial targets set by analysts, sending its shares up nearly 6 percent to $591.68 on Friday and easing some of Wall Street's concerns that mobile returns might not justify the investment.
"People just haven't given them any credit for that division. I think it could be a huge part of the overall company," said Pat Adams, portfolio manager at the Dunham Loss Averse Growth Fund, which owns Google shares.
"There are so many more mobile devices out there than there are PCs," Adams said. "What they did was brilliant to give that operating system away to get the search part of it," he added.
Google lets phone makers such as Samsung Electronics, LG Electronics and HTC Corp use its Android software for free, banking on consumers using those phones to visit Google's advertising-supported website to search for information.
The booming popularity of smartphones has frustrated many of the established giants of the computer industry, from Microsoft Corp to Hewlett-Packard Co.
For Google, whose business is built upon people using its search engine, making the transition from the personal computers to mobile devices is crucial. Continued...