By Alexei Oreskovic
SAN FRANCISCO (Reuters) - Google Inc's
The market reaction put Google's stock within striking distance of $1,000, following what analysts said was a strong, but not spectacular quarter.
Shares of the world's No.1 Internet search engine jumped 8 percent to $959.65 in after-hours trading on Thursday, after it reported a 23 percent rise in revenue from its Internet business, excluding fees paid to partners, of $10.8 billion in the third quarter.
"Expectations going into earnings were a little muted," said Needham & Co analyst Kerry Rice. "They did what they needed to do to impress investors."
Google's business, like rivals Facebook Inc
The average cost-per-click - the price that marketers pay Google when consumers click on their ads - decreased 8 percent during the third quarter, deepening the 6 percent price erosion that Google experienced in the second quarter.
But the total amount of paid clicks increased 26 percent year-on-year during the three months ended September 30, the highest rate of growth in one year.
"That's the key story, their ad volume growth is outpacing the decline in cost-per-clicks," said JMP Securities analyst Ronald Josey.
Roughly 40 percent of the traffic to YouTube, the Google-owned video website, now occurs on mobile devices, Google Chief Executive Larry Page said on Thursday. Two years ago, only 6 percent of YouTube's traffic occurred on mobile devices.
"Google's done a good job of being in the right place in mobile as it grows, and being able to monetize that," said Rice.
He also pointed to Google's 28 percent revenue growth outside of the U.S. and Britain as further signs of Google's strength.
Google's results offered a sharp contrast to online rival Yahoo Inc, which reported a slight dip in quarterly revenue on Tuesday and lowered its financial outlook.
NO MORE ANALYST CALLS FOR PAGE
On Thursday, co-founder and CEO Page told analysts he will no longer be joining the company's quarterly earnings conference calls on a regular basis.
"I know you all would love to have me on, but you're also depending on me to ruthlessly prioritize my time for the benefit of the business," Page said, without providing further explanation for the change.
Page, who with Sergey Brin conceived of what is today the world's most-used Internet search engine, is not known for assiduously courting Wall Street investors. And this year, Page revealed that his vocal cords are partially paralyzed as the result of a rare medical condition.
Needham & Co's Rice said he did not expect Page to be any less involved in running the company, noting that Amazon.com Inc's
Google executives also provided few details on the recently-launched MotoX smartphone, the flagship device within Google's Motorola mobile phone business.
Operating losses at Motorola were $248 million during the third quarter, compared to a loss of $192 million in the third quarter of 2012.
Google's consolidated business earned $2.97 billion, or $8.75 per share in the three months ended September 30, compared to $2.18 billion, or $6.53 per share, last year.
Excluding certain items, Google said it earned $10.74 per share, compared to the $10.34 that analysts were expecting, according to Thomson Reuters I/B/E/S.
Consolidated revenue of $14.89 billion compared with the $14.79 billion average analyst estimate.
(Reporting by Alexei Oreskovic; Editing by Bernard Orr)