San Francisco: Google shares surged close to the $1,000 mark after quarterly earnings figures showed that the Internet giant’s profits are climbing despite a trend toward cheaper advertising on smartphones and tablets.
Google reported net income of $2.97 billion on revenue that rose to $14.89 billion in the quarter that ended on September 30.
Profits were up 36 percent from the same period a year ago and topped expectations. Revenues also beat forecasts with a 12 percent jump year-on-year.
The California company’s stock leapt more than eight percent to $960.41 a share in after-hours trade on Thursday.
“We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device,” Google chief Larry Page said during an earnings call with analysts.
Google’s main money-maker, search advertising, remained strong while revenue from areas such as the online Play shop for apps, music, books and other digital content was on the rise, according to executives.
And, while prices paid for advertising were dropping due to a shift to cheaper mobile ads, more people were “clicking” on marketing messages in moves that resulted in revenue for Google, the earnings report showed.
“When you look across the company, it is amazing how all the teams are executing,” Page said during an earnings call with analysts.
Mobile ads are proving their worth by triggering actions such as phone calls to businesses or shopping visits to real-world stores, according to Google chief business officer Nikesh Arora.
And there is “great progress” with Enhanced Campaigns for marketers to synchronize advertising across various devices people use to access the Internet, he said.
The number of paid clicks on ads served up at Google websites or those of affiliated online venues was up 26 percent from the same quarter last year.
“Video ads now are a significant portion of brand advertising,” Arora said. “Smart brands are really loving their engagement with YouTube.”
Google reported that about eight percent of its revenue in the recently-ended quarter was from handset maker Motorola Mobile in a drop from what the Google-owned operation took in during the same period last year. The unit recorded an operating loss of $248 million in the past quarter.
Motorola recently launched a well-received Moto X smartphone and is ramping up marketing and distribution of the handsets.
The Android-powered phone is the first Motorola smartphone created in collaboration with Google since the Internet titan completed its $12.5-billion purchase of Motorola Mobility in May of last year.
Moto X smartphones are powered by Google’s Android software and features include sophisticated voice controls and anticipating what users might want from the Internet at any given moment.
“We have made tremendous progress on voice recognition,” Page said of spoken command features woven into Google products and services.
“Even in a period of the last six months, the accuracy has caught up quite a bit; it is superfast.”
Page, however, told analysts that they wouldn’t be hearing his voice as often on quarterly earnings calls, as he would be letting Arora and chief financial officer Patrick Pichette handle those from now on.
“Going forward, I won’t be joining every earnings call,” Page said.
“I know you would all love to have me on, but you are also depending on me to ruthlessly prioritize my time for the good of the business.”
Page said he remained devoted to investing in big innovations such as the self-driving car being refined in a Google lab devoted to disruptive new technology.
But Google won’t be selling the cars any time soon. “It is still a long ways from being a commercial product,” Page said.