Tech giant Google has now joined the very few group of companies whose stock price exceeds $1,000.
This Friday stocks jumped 13% after the company revealed its third quarter earnings late on Thursday evening.
The company generated approximately $3 billion, up by 36% from 2012. This immense increase in revenue, which is largely thanks to mobile advertising, has cause the market value of the company to increase by a staggering $40 billion. This has allowed Google to stomp their rival, Yahoo, whose market value increased by a pale $34 billion.
This has allowed Google to close in on ExxonMobil to compete for the title of second most valuable company. The number one position is still help by Apple whose value is over $460 billion.
Many analysts believe that Google’s mobile advertising, along with its new advertising strategy, are the main reason for the shocking growth.
As the world moves towards smartphones and tablets and away from the desktop computer, mobile advertising is growing into a large market and in the lead, so far, is Google.
The company lowered the prices of their mobile ads due to the lack of click-through rates. However, this caused a large, and slightly unexpected, increase in the overall number of mobile ads. Google’s paid clicks increased to 26% and once again trumped Yahoo’s 21%.
With a revamp in its advertising strategy, which the company named ‘Enhanced Campaigns’, Google no longer allowed their clients the option of selecting between different platforms such as desktops and smartphones.
Google’s algorithms are now carefully calculating what platform and on what occasion to display selected text, image and video advertisements.
This has provided the company with a method that facilitated a lower decline in cost-per-click rate.
Although this method has proved fruitful so far, it must consistently keep up this pace in order to retain its success.
In addition, Google is developing certain technologies that investors are concerned about. The company’s self-driving car has been a hot topic on many tech forums but on the stock forefront, this can seriously damage Google’s performance if it is not accepted for commercial use by the public.
Berkshire Hathaway still holds the number one spot for share price at a hefty $175,400.
Seaboard comes in second with $2,828 per share and in third place was Priceline, just over $1,000 dollars at $1,048.
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