Google Inc shares soared on Thursday after the Internet titan beat second-quarter earnings expectations by riding on the hot growth of mobile search and advertising on YouTube.
The Silicon Valley-based company said that second-quarter net income climbed 2 percent to US$3.4 billion on an 11 percent rise in revenue to US$17.7 billion.
Google’s shares soared more than 10 percent in after-hours trade to nearly US$642 after marking a 3.5 percent gain during the regular session prior to the earnings release.
“We continue to close the gap between mobile and desktop search monetization,” new Google chief financial officer Ruth Porat said during her first earnings call at the company.
She credited work done to improve user experiences on mobile devices along with the quality of ads, as well as finding ways to merge online activities with real-world commerce.
Porat said desktop search-based advertising also posted solid revenue growth. And Google’s YouTube saw substantial growth in viewer engagement during the past year, attracting marketers to its advertising platform.
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 Web site, Google said.
Growth in “watch time” continues to accelerate, Porat said.
She contended that there was tremendous potential in the fact that YouTube has more than 1 billion users and that the number of people in the 18-49 age group who watch YouTube videos on mobile devices was greater than the number watching cable TV.
YouTube is focused on “reinventing the television experience for the Internet age,” Google chief business officer Omid Kordestani said.
Google expects to boost its profits in the future by attaching “buy buttons” to mobile ads to make shopping easier for smartphone users.
The introduction of “Purchases on Google” came as Facebook Inc and Pinterest Inc also try to make shopping seamless for people using their sites, putting themselves in position to profit from transactions or related advertising.
Google took in a 31.42 percent share of money spent on digital ads worldwide last year, with that portion only expected to slip marginally this year as leading social network Facebook gains ground, according to industry tracker eMarketer Inc.
The amount of money spent on digital advertising globally is expected to increase by more than 16 percent to approximately US$170.85 billion this year, eMarketer predicted.
Google continues to dominate when it comes to online search-related advertising, with its share of the market this year expected to be 54.5 percent, it said.
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