Google shares soar as YouTube growth allays fears over Facebook
Shares of Google, the world’s most valuable company after Apple Inc, hit a record high of $696
Google Inc’s shares surged as much as 15.7 percent on Friday, adding nearly $63 billion to its market value, as strong growth in mobile ad revenue allayed concerns its YouTube business could be hurt by Facebook Inc’s push into video.
The surge in the stock, which sent the Nasdaq composite index to a record intraday high, came a day after Google reported better-than-expected revenue and profit for the first time in six quarters.
Google’s share price rise added more to its market value than the combined market capitalization of Twitter Inc and LinkedIn Corp.
Shares of Google, the world’s most valuable company after Apple Inc, hit a record high of $696, valuing the Web search giant at about $466 billion.
At least 27 brokerages raised their price targets on Google’s stock by as much as $150 to as high as $800, with analysts also welcoming new Chief Financial Officer Ruth Porat’s emphasis on disciplined spending.
At the highest price target, Google will be valued at $545 billion. Apple was valued at about $740 billion as of Thursday’s close.
“She (Porat) is known to be tough as nails when it comes to expense management and I think the first quarter off the back, she is delivering,” FBN Securities analyst Shebly Seyrafi told Reuters. “A lot of investors are comforted by the fact that her first quarter as CFO, reporting, she is delivering.”
Online video ads could be a $17 billion opportunity in the United States alone by 2017 and YouTube looks best positioned to benefit, Jefferies & Co analysts wrote in a note.
Google said watch time for YouTube rose 60 percent in the second quarter and the video service roped in more viewers aged 18-49 than any U.S. cable network on mobile alone.
Google and Facebook are trying to woo big companies to market their products via online videos.
YouTube has an edge over Facebook as it has a more mature monetization platform that seems to attract the best content, Piper Jaffray analyst Gene Munster said.
Google said the gap was closing between mobile and desktop “cost per click” (CPC), or the average price of online ads.
Mobile CPCs are likely to exceed desktop CPCs in the long term, Munster said.
Google’s CPCs fell 11 percent in the quarter but that is not the complete story, Jefferies analysts said.
YouTube TrueView ads, where advertisers pay only when users don’t skip an ad, cost less than traditional search ads.
Google’s fast rampup of YouTube monetization is also hurting pricing, they said.
The company’s advertising revenue rose 11 percent to $16.02 billion. The number of paid clicks increased 18 percent.
“This growth has steadily held in the mid-to-high teens since at least Q1:13,” RBC analyst Mark Mahaney said. “Such consistency is a rarity, especially for a behemoth business ...”
Of 48 analysts covering the stock, 38 have “buy” or higher rating, while 10 have “hold.” The median price target is $672, according to Thomson Reuters data.
Google’s shares were up 15.5 percent at $695.13 in late morning trading on the Nasdaq. Facebook’s shares also rose 5 percent to $95.30.
YouTube indexes Arab cinema through new channel ‘Aflam’Many of the films users can find through Aflam are from the “golden age” of Arab cinema Digital
Inspiring or far from it? Google’s Ramadan aide gets mixed reviewsThe web portal offering customized information about Ramadan started with high hopes but had since provoked some negative reviews. Art and culture
Google’s Waze to start carpooling pilot program in IsraelThe new application, called RideWith, will use Waze’s navigation system to learn the routes drivers most frequently take Technology
Unsend! New Gmail button prevents users from sending regrettable emailsGoogle is making it easier to avoid getting into trouble with a misdirected or inappropriate email Digital
Google launches company to tackle city life woesSidewalk Labs based in New York City was described as an ‘urban innovation’ firm Business
Egyptian repairman beats Google in search rankingDue to a bug with search giant Google, for a time, an Egyptian repairman became one of the most-searched for men in his country. Eyad Nour, an ... Digital
Google out to win trust with simpler privacy controlsThe moves come as Google works to assure users that it is not abusing people’s privacy Technology
Smart jeans? Google, Levi Strauss to make touch-screen clothesThe Internet titan used its annual developers conference in San Francisco to reveal its so-called Project Jacquard Technology
Google offers unlimited free storage of photos, videosGoogle is willing to store and organize all of the world's digital photos and videos for free. Digital
Google aims to patent child toy that pays attentionGoogle has filed a patent for toys that pay attention to who is in a room and can interact with other media devices Digital