Google shares soar up, pass US$1,000 on strong earnings

Google shares soar up, pass US$1,000 on strong earnings - 20th October 2013

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NEW YORK -- Shares of Internet search and advertising titan Google soared more than 13 percent to pass the US$1,000 mark for the first time Friday after a strong earnings report.

The earnings demonstrated that Google was smoothly building its presence in the mobile area while advertising earnings rose all around, with particular help from Google's YouTube website.

Ad volume growth accelerated to 26 percent year-on-year, Morgan Stanley pointed out, showing that Google was well on top of the evolution of the market beyond personal computers to smartphones and tablets.

“Rather than struggling with a mobile transition, Google is benefiting from increased screen fragmentation,” the broker said.

Google reported its earnings after trade closed Thursday.

The shares soared beyond the US$1,000 barrier in early trade Friday, topping US$1,015 before settling at the close at US$1,011.41, up 13.8 percent for the day.

The surge helped push the S&P 500 well beyond Thursday's all-time closing high to a fresh record of 1,744.50, up 0.7 percent for the day.

Google's success helped pull shares of other tech firms up as well, with social networking leader Facebook rising 3.8 percent, online retail power Amazon up 5.8 percent, and Yahoo 2.0 percent.

Together they helped drive the Nasdaq Composite index to a 1.3-percent gain to 3,914.28, its highest level since September 2000.

Google reported Thursday a 36 percent jump in its third-quarter net profit to US$2.97 billion, or US$8.75, a share. Revenues also beat forecasts with a 12 percent jump year-on-year.

Analysts said it was doing well in all areas of business, and had proven its ability to build business on its Android smartphone platform.

“We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device,” Google chief Larry Page told analysts.

Pivotal Research Group warned of eventual erosion of the company's still-healthy margins, but added: “Longer term, we remain optimistic about Google's continued success as the leading seller of display-based media and ad tech, and as the dominant provider of paid search advertising.”

At the US$1,011 mark, Google shares were up 43 percent from the beginning of the year, and the company's market value reached US$337 billion, still shy of leader Apple's US$462 billion.

Google was the second company on the S&P 500 list to top US$1,000. Online travel firm Priceline was the first past the post in September, soaring to US$1,074; it closed at US$1,048 Friday.