Google's mobility plans cloud strong Q4 | india | Hindustan Times
Today in New Delhi, India
May 29, 2017-Monday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Google's mobility plans cloud strong Q4

Google Inc's strong holiday-quarter results may take a backseat to growing concerns about long-term margins after it dives into a fiercely competitive smartphone market through its $12.5 billion acquisition of Motorola Mobility Holdings.

india Updated: Jan 18, 2012 18:31 IST

Google Inc's strong holiday-quarter results may take a backseat to growing concerns about long-term margins after it dives into a fiercely competitive smartphone market through its $12.5 billion acquisition of Motorola Mobility Holdings.

Shares in the Internet search and advertising leader, which reports fourth-quarter results on Thursday, scaled a four-year high of $670.25 this month on expectations it benefited from strong online holiday shopping.

But that enthusiasm cooled after Motorola -- the cellphone pioneer that has been lapped by the likes of Apple Inc -- warned it will miss Wall Street's sales expectations in the pivotal holiday quarter. That would mark the second straight quarter that revenue falls short of target.

Investors have been uneasy about Google's plans to buy Motorola, a deal the companies expect to close early this year. CEO Larry Page has never fully detailed his long-term strategy for the asset other than saying it will be run as a separate company. Analysts say the company fears alienating Samsung and other Motorola rivals that helped its Android platform become the world's foremost mobile-software system.

"You've got this big millstone that's about to be draped around Google's neck," said BGC Partners analyst Colin Gillis.

"Motorola is a low to no-margin business mixing with a higher margin business," Gillis said.

In the short run, Google remains one of the largest beneficiaries of a rapid migration of shoppers and viewers to the Internet from traditional media.

Online spending in the United States reached a record $35.27 billion from November 1 through December 26, up 15 percent versus the corresponding period last year, research house comScore reported.

Analysts believe Google's U.S. search advertising business performed strongly in the last three months of the year, as online retailers and other companies spent heavily to advertise on Google, where two out of every three Internet searches take place.