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Google profit beats estimates as new markets fuel growth

Web search giant beats estimates

SAN FRANCISCO - Google Inc., the world’s largest Internet-search company, reported first-quarter profit that topped analysts’ estimates after demand for its newer services fueled growth. It also introduced a new stock structure.

Profit before certain costs was $10.08 a share, the Mountain View, California-based company said on its website. Analysts had projected $9.64 on average, according to data compiled by Bloomberg. Excluding revenue passed to partner sites, sales rose to $8.14 billion, matching estimates.

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Chief executive Larry Page, who took charge a year ago, has pushed Google deeper into display advertising and mobile services. This year the company will account for 16.5 percent of the US market for display ads, which include banners and videos, according to EMarketer Inc. By next year, Google is projected to grab about 20 percent, unseating Facebook Inc. as market leader.

“The viability of Google is still very, very strong,’’ said Ron Josey, a ThinkEquity LLC analyst in New York. “There’s still a lot of room for growth across its multiple businesses.’’

The company also announced plans for what it calls an effective stock split, introducing a new class of nonvoting capital stock. The shares will be distributed through a stock dividend to existing shareholders.

Google’s shares were little changed in late trading after the announcement. They had risen 2.4 percent to $651.01 at the close in New York.

Google still gets most of its revenue from Internet search ads - the text links that appear in query results. The average cost per click declined 12 percent in the first quarter after falling 8 percent in the fourth quarter. The number of paid clicks rose about 39 percent.

The company posted first-quarter net income of $2.89 billion, or $8.75 a share, compared with $1.8 billion, or $5.51 a share, a year earlier.

Mobile search ads have become a bigger piece of Google’s business. Companies will probably commit 23 percent of their search-based ad spending to mobile devices by the end of this year, according to Marin Software. That’s up from 8.7 percent at the end of last year.

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