Google shares pass $1,000 mark for first timeFriday 18 October 2013 18.32
Google shares have passed $1,000 for the first time amid growing optimism about new advertising for wireless devices and online video.
The world’s largest search-engine company gained a record 13% to hit a high of $1,007.40 in opening US trade before retreating slightly in later trade.
The stock, sold at $85 a piece in a 2004 initial public offering, has risen every year since except for 2010 and 2008, when it slumped 56% during the recession.
The Internet company is benefiting from ads for new formats after expanding beyond delivering advertisements alongside search results on desktop computers.
Google should take 33% of the global online-advertising market this year, up from 31% in 2012, according to EMarketer Inc.
Google, based in California, already has one of the highest market capitalisations in the US at about $330 billion, trailing only Apple and Exxon Mobile.
Among the few companies with a stock price above $1,000 are online-travel company Priceline.com and Seaboard Corp, a producer of turkey and pork with a market value of just about $3 billion
Google’s shares jumped today after reporting sales and profit that beat estimates for the third quarter.
Revenue, excluding sales passed on to partner sites, was $11.92 billion, exceeding the average analyst projection for $11.64 billion, according to estimates compiled by Bloomberg. Profit excluding certain items was $10.74 a share, topping analysts’ average projection of $10.36, Google reported last night.
While mobile dragged down ad prices, a rise in the number of clicks on the ads overcame the declines to boost sales. The number of paid clicks jumped 26%, despite the company reporting an 8% decline in average costs.
The search provider has been working to address falling prices. The company earlier this year introduced a new advertising service called “enhanced campaigns,” encouraging marketers to funnel more of their spending onto wireless devices.
Google addressing move to mobile advertising
Google's business, like rivals Facebook and Yahoo, has come under pressure as more consumers access its online services on mobile devices such as smartphones and tablets, where advertising rates are lower than on PCs.
Roughly 40% of the traffic to YouTube, the Google-owned video website, now occurs on mobile devices, Google's chief executive Larry Page said. Two years ago, only 6% of YouTube's traffic occurred on mobile devices.
Google's results offered a sharp contrast to online rival Yahoo, which reported a slight dip in quarterly revenue on Tuesday and lowered its financial outlook.
The company's co-founder and CEO Page told analysts he will no longer be joining the company's quarterly earnings conference calls on a regular basis.
"I know you all would love to have me on, but you're also depending on me to ruthlessly prioritise my time for the benefit of the business," Page said, without providing further explanation for the change.
Page, who with Sergey Brin conceived of what is today the world's most-used Internet search engine, is not known for assiduously courting Wall Street investors. And this year, Page revealed that his vocal cords are partially paralysed as the result of a rare medical condition.
Google executives also provided few details on the recently-launched MotoX smartphone, the flagship device within Google's Motorola mobile phone business.
Operating losses at Motorola were $248m during the third quarter, compared to a loss of $192m in the third quarter of 2012.
Google's consolidated business earned $2.97 billion, or $8.75 per share in the three month period, compared to$2.18 billion, or $6.53 per share, last year.
Consolidated revenue of $14.89 billion compared with the $14.79 billion average analyst estimate.