Though Google has a dominant market share in search, competition is heating up, most notably from
(FB - Get Report)
, which recently
announced Graph Search
, as it looks to enter the lucrative search business. Google's also up against
(MSFT - Get Report)
(YHOO - Get Report)
, but neither are serious competitors to the Google crown.
JPMorgan analyst Doug Anmuth noted that search engine marketing (SEM) checks were mixed this quarter, but believes that CPCs and Product Listing Ads (PLAs) are strong this quarter. "4Q SEM checks were generally positive on a Y/Y basis with most agencies showing an acceleration in overall paid search growth driven by strong holiday spending, while others saw modestly softer trends due to a mix shift to int'l markets," Anmuth wrote in a note. He rates Google buy with a $802 price target.
In Facebook's most recent quarter, earnings from mobile were far better than expected, so it's crucial that Google show a similar trajectory, or risk having more doubt placed on the company's efforts in this area.
There's also the matter of Google's
acquisition. Last week Google put out an intriguing
discussing the sale of
, which it announced in December. In the post, Google noted that results from Motorola Home "will be presented as a separate line item in our 2012 consolidated statements of income." Essentially, it's telling Wall Street not to bother with these results due to the sale. It remains to be seen whether they weigh on overall numbers.
As Google starts to drive meaningful revenue from hardware, including its Nexus line of smartphones and tablets, anything out of the Motorola division will be heavily scrutinized. Android is the leading mobile operating system in the world, but making money off it is another story.
We'll find out soon enough whether Google has proved its ability to make money from mobile, or whether the search result has "timed out."
Interested in more on Google? See TheStreet Ratings' report card for
Written by Chris Ciaccia in New York