Google search will start factoring in how easy websites are to read on smartphones
New York - Arab Today
Google shares rocketed 16 percent to all-time highs Friday following an earnings report that wowed Wall Street with strong mobile advertising gains and a bullish outlook for its YouTube business.
Google's Nasdaq-traded C shares (GOOG) rose $93.08 to $672.93, bringing the company's full market value to about $468 billion, a gain of $65 billion, the biggest one-day gain in US history, according to S&P Indices.
Google now trails only Apple, the world's largest company, in market value. Apple rose 0.9 percent to end the day valued at $747 billion.
The share price jump added about $4 billion each to the fortunes of Google co-founders Larry Page and Sergey Brin.
In its earnings report after markets closed Thursday, Google reported second-quarter net income had climbed two percent to $3.4 billion on an 11 percent rise in revenue to $17.7 billion, thanks in part to increases in mobile advertising.
New chief financial officer Ruth Porat was especially upbeat on the potential from Google's YouTube streaming video business.
Time spent watching YouTube videos on smartphones or tablets has surged as part of a 60 percent jump in overall viewer time spent on the website, Google said.
Porat said YouTube has more than one billion users and that the number of people in the key 18-49 age group who watch YouTube videos on mobile devices was greater than the number watching cable television.
Analysts also pointed to signs that Google was reining in spending and comments from Porat that suggested greater shareholder returns were in the horizon.
"Dawn of a New Era?" asked a note from Deutsche Bank with a "buy" recommendation.
"Kinda feels like it."
BMO Capital Markets issued a report following the call amplifying on an upgrade to the stock released the prior day.
"While we tepidly stepped into this recommendation yesterday, our conviction is now much stronger and we look for incremental insight over the coming quarters on continued cost discipline and the potential for capital return to support the thesis further," BMO said.