Google Profits Rise As It Spreads Ads Across Devices

Revenue on Google-Owned Sites Rose 18% From the Same Period Last Year

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Google, owner of the world's most popular search engine, reported profit that topped analysts' estimates as advertisers increased spending on mobile and video promotions.

First-quarter profit, excluding some items, was $11.58 a share, Google said in a statement today. Analysts had projected $10.68 per share, according to data compiled by Bloomberg. Net income increased 16% to $3.35 billion, or $9.94 a share.

Google is pushing beyond its roots as a desktop-based search business to enter new ad-driven markets, including smartphones, Web services and video, stepping up competition with Apple Inc. and Microsoft Corp. The company's search and video businesses bolstered results with Google-owned sites generating $8.64 billion in revenue for the quarter, up 18% from the year-ago period, according to Benjamin Schachter, an analyst at Macquarie Securities USA Inc.

"The core business is still doing well," Schachter said. "They're managing to maintain a lot of strength in that core business across geographies."

First-quarter revenue, excluding sales passed on to partner sites, rose to $11 billion, Google said. Analysts had projected sales of $11.2 billion, according to data compiled by Bloomberg.

Google CEO Larry Page defended the company's investments in speculative ventures that could be big markets in the future, like Google Glass and self-driving cars. "There are so many opportunities in the world to create technology to make people's lives better," he said on a call with investors. "We are still at only 1% of whats possible. "

Paid Clicks
The average amount advertisers paid each time a user clicks on a promotion decreased 4%, following a 6% decline in the previous three-month period. The total number of clicks advanced 20%, after a 24% gain in the fourth quarter. Analysts had predicted the cost per click would fall 2%, while the overall number would climb 20%, according to data compiled by Bloomberg.

Rates for mobile ads can be about 52% less than for promotions on desktop machines, according to Covario Inc., an online marketing agency.

Google is counting on mobile advertising to bolster growth. In February, Google upgraded its online advertising service to make it easier for marketers to reach users on different devices, including smartphones and tablets. The revamped AdWords service will also help companies manage bids for ads running at different locations and times,

The new push in mobile also includes the $12.4 billion acquisition of Motorola Mobility, which makes handsets using Google's Android software.

Google has made other investments outside its core search- based online advertising business. In February Google said it would expand its laptop line, called Chromebook, to include a higher-end touchscreen version that cost at least $1,299 and up. Earlier this month, the company unveiled plans for broadband and television service in Austin, Texas, and Provo, Utah, after starting a similar program in Kansas City last year.

-- Bloomberg News --

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