Will Google Grow From Mobile?

Google Inc  is the more properly positioned than any company to benefit from the shift to mobile, increased local advertising and wearables, analysts said after the search giant posted its 18th straight quarter of 20 percent-plus revenue growth.

At least eight brokerages raised their price targets on the stock on Friday by as much as $75, to a high of $745.

The company, which is also set to benefit from the so-called “internet of things”, said that second-quarter revenue rose 22 percent to $15.96 billion, beating the average analyst estimate of $15.61 billion.

Growth was driven by the company’s core search business, YouTube and product-listing ads, which combined to drive three times as much mobile traffic for merchants compared with last year, Jefferies analysts wrote in a note.

Brokerage Jefferies maintained its “buy” rating and $700 price target on the stock.

Of the 46 analysts covering Google, 36 have a “buy” or a higher rating on the stock and 10 have a “hold”. There are no “sell” ratings, according to StarMine data.

Google earns most of its revenue from advertising.

The number of “paid clicks” by consumers on ads serviced by Google increased 25 percent year-on-year in the quarter.

However, the average price of the ads declined 6 percent as ad rates on mobile phones are typically cheaper than traditional online ads because of their smaller screens.

“Google is successfully transitioning its business from PC to mobile, and is arguably in a more favorable position in mobile than it was in PC, which should eventually be reflected in a higher multiple,” Deutsche Bank analyst Ross Sandler wrote in a client note.

Google also owns Android, the world’s most-used mobile software, and YouTube, the most popular video-streaming service.

Other online companies such as Facebook Inc and Twitter Inc  are also revamping their advertising businesses to take advantage of the shift to mobile devices.

But Google has established unusually deep competitive “moats” around its business through scale, aggressive product innovation and substantial investment, RBC Capital Markets analysts wrote in a research note.

Google’s capital investment budget has topped $17 billion over the past five years, and the company has spent about $13 billion on research, according to analysts.

The company is also spending big to push into new markets with innovations such as wearable computers, ultra high-speed internet access and home automation – the “internet of things.”

Source

YouTube Explodes

According to a study of over 16,000 mobile YouTube users conducted by Google, 75% of respondents said that mobile is their primary way of accessing YouTube. At first glance, that figure may come as no surprise – after all, how shocking is at that a survey of mobile users finds that they watch a lot of YouTube Mobile? However, it’s actually a rather telling number.

For some of us, watching YouTube on a mobile device is an additional way to watch video, not the primary way. But for a large majority of mobile video users, it’s completely the opposite.

The survey found that 70% of the respondents reported visiting YouTube Mobile at least once per day and, while there, 58% spent more than 20 minutes per visit. 38% even when as far as to report that they feel like YouTube Mobile is replacing their desktop video usage entirely.

As noted by the Google Mobile Ads blog post reporting this data, these figures aren’t really a surprise. It referenced a recent Nielsen survey that found that YouTube Mobile is the number one mobile video viewing site in the U.S., with more than 7.1 million uniques.

Of course, Google is revealing this news to pique the interests of mobile advertisers – the post mentions that advertisers can now buy a “daily roadblock” which allows them to own all available ad impressions for 24 hours. Those ads would run on the Search, Browse and Home pages of the mobile website.  Read More……