Thursday, January 20, 2011

Google Inc. (NASDAQ: GOOG): Q4 Earnings Preview 2010

Google Inc. (NASDAQ: GOOG), owner of the world's most-popular online search engine, is scheduled to release fourth quarter earnings after the closing bell on Wednesday, January 20, 2011. Analysts, on average, expect the company to report earnings of $8.06 per share on revenue of $6.04 billion. In the year-ago quarter, the company reported earnings of $6.79 per share on revenue of $4.95 billion.

Google Inc., a technology company, maintains index of Websites and other online content for users, advertisers, Google network members, and other content providers. The company's innovations in web search and advertising have made its web site a top internet property and its brand one of the most recognized in the world.

In the preceding second quarter, the Mountain View, California-based company's net income was $2.17 billion, or $6.72 a share, compared to $1.64 billion, or $5.13 a share, in the year-earlier quarter. On an adjusted basis, the company earned $7.64 a share in the latest quarter. Revenue increased 23% to $5.5 billion from $5.94 billion.  Analysts, on average, expected the company to report earnings of $6.67 per share on revenue of $5.25 billion. Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of its AdSense partners, increased approximately 3% over the third quarter of 2009 and increased approximately 2% over the second quarter of 2010. Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of its AdSense partners, increased approximately 16% over the third quarter of 2009 and increased approximately 4% over the second quarter of 2010. 

Google is the undisputed market leader when it comes to web search. Google eads the search market with a share of around 68% while competitors Yahoo (YHOO) and Microsoft (MSFT) are way behind Google. 

Google is also pursuing an aggressive strategy in rapidly growing mobile advertising market. According to market research firm EMarketer, U.S. mobile advertising spending will grow 43 percent this year to $593 million from $416 million last year. Mobile ad spending is forecast by EMarketer to grow almost threefold more by 2013, reaching $1.56 billion. In mobile space, Google is taking on Apple Inc.'s (NASDAQ: AAPL) iPhone with its Android operating system. Google has made its Android operating system software available on a variety of different mobile devices. Market Research company, comScore 's latest mobile subscriber market share report for the three month average period ending November 2010 indicates that Google's open source operating system, Android continues to increase its popularity in the United States. The market research firm said in a report that Android has a 26 percent market share in the U.S., snatching the second position after Research in Motion’s (NASDAQ: RIM) BlackBerry while Apple was relegated to the third spot with 25 percent market share. Google recently announced that there are now more than 300,000 Android phones activated every day. In November of 2009, Google held just 3.8% of the market. At recently held CES 2011, Google recently offered a preview of its newest tablet-friendly Android mobile operating system, Android 3.0, or Honeycomb,.

During the quarter in review, Google also unveiled a laptop powered by its Chrome operating software, a move that could pose a challenge to the dominant position held by Microsoft Corp. (NASDAQ: MSFT) and Apple Inc. n computer software. The first laptops will be first made by Acer Inc. and Samsung Electronics Co. Other manufacturers are also building devices running the software, Google said. The company said that the first laptops powered by the Chrome OS will be available for sale in the first half of 2011. 

Among other developments, Google and Myspace Inc., a division of News Corp. (NASDAQ: NWS) announced a multi-year agreement to renew and expand their long-standing search and advertising relationship. Under the terms of the new agreement, Google would continue to power Myspace search and search advertising and would also provide additional display advertising services to enhance the rich entertainment content experience inherent on Myspace.

In terms of stock performance, Google shares have gained nearly 5 percent over the past year.

Full Disclosure: None.
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