Google impresses Street with mobile

CALIFORNIA: At least nine brokerages raised their price targets on Google Inc Friday, a day after the Web search engine leader cheered investors with its third-quarter results and unveiled the strength of its display advertising and mobile segments.

"Combined with licensing revenues, there is a $4.5 billion in non-search revenue run rate, suggesting diversification is better than many thought and investments are driving growth," BofA Merrill Lynch analyst Justin Post wrote on a note to clients.

Investors had feared that Google, seeking new sources of growth, was spending recklessly on initiatives such as its Android mobile software, acquisitions and renewable energy projects with uncertain returns.

But Google said its mobile and display advertising operations generated annualized revenue run rates of more than $1 billion and $2.5 billion, respectively -- underscoring the outcome of investments into smartphones and online projects.

"Going forward, we think instant search will yield a better user experience which will likely result in market share gains ... new mobile devices will likely increase mobile search share," J.P.Morgan Securities analyst Imran Khan wrote.

The acceleration in key revenue growth metrics including the core search engine business, and increased transparency on mobile and display segments will help Google drive a higher valuation, analysts said.

Google shares were up about 9 percent at $588.82 in trading before the bell on Friday. They closed at $540.93 Thursday on Nasdaq.