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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.”
Skype Gives Asterisk The Boot
The Internet is buzzing with news that Skype is in the process of giving Asterisk the boot by no longer offering Skype for Asterisk starting in July. Skype for Asterisk is proprietary software that was developed by Digium with Skype’s approval. The software was unique in that it allowed Asterisk based systems to join Skype’s VoIP Network. We assume this will not negatively impact current users for the next couple of years.
We wonder if Microsoft had a hand in killing this deal with Asterisk since they have a competing product. One could also assume that Skype wanted to develop a native application and not use Asterisk for SIP implementations. I guess we will need the executives at Skype to fill us in on the details one day.
Bill Had A Hand In Microsoft Buying Skype
One of the world’s richest people, Bill Gates had given his blessing for Microsoft to buy Skype for $8.5 billion dollars. Actually, Bill Gates pressed other executives on the board of directors to support or back the idea of gobbling Sky which has yet to turn a profit.
Word on the street is that Bill told the Gates BBC in an interview which will be televised this weekend that he played an instrumental role in getting this deal approved by the board of directors. So this really squashes any rumors that Steve Ballmer was the force behind the deal getting approved by the executive team.