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TheStreet Open House

Google Surges: What Wall Street's Saying

NEW YORK (TheStreet) –– Second-quarter results from Google (GOOG) demonstrated that even though cost-per-click (CPC) continues to weaken year over year, the company's bundling efforts appeared to be paying off, even if they're taking longer than expected.

Mountain View, Calif.-based Google noted CPCs, a key advertising metric, remained flat sequentially but fell 6% year over year. Google also noted that CPCs for Google sites fell 7% year over year and 2% sequentially, but that network CPCs rose 2% sequentially, despite falling 13% year over year. Google took measures last year to start having advertisers buy ads on all platforms (mobile and desktop) all at once to mitigate the weakness seen in mobile ads.

Though CPCs remained flat, paid clicks, "which include clicks related to ads served on Google sites and the sites of our Network members," continued to surge. Paid clicks rose approximately 25% year over year and 2% sequentially. For the first time, Google gave some detail on how paid clicks are performing at some of its properties, including Maps, YouTube and Finance.

"YouTube engagement ads like TrueView, and other owned and operated properties like Maps and Finance, increased approximately 33% over the second quarter of 2013 and increased approximately 6% over the first quarter of 2014," the company said in a press release.

For the second quarter, the search giant reported earnings of $6.08 a share, missing analysts' estimates of $6.23 a share by 15 cents. Revenue grew 21.7% from the year-ago quarter to $15.96 billion. Analysts surveyed by Thomson Reuters expected revenue of $15.61 billion.

Shares of Google were higher in early Friday trading, gaining 1.9% to $584.59.

Though Google has focused on getting the mobile part of its advertising business right, the company is hellbent on expanding into other adjacent areas, particularly shopping. The company's product listing ads (PLAs) compete directly with companies like Amazon (AMZN), allowing users to search for an item and buy it right there without having to go to another site like Amazon. On the company's earnings conference call, Chief Financial Officer Patrick Pichette noted that PLAs drove three times more traffic in the second quarter than they did last year. Pichette also noted that another Google shopping program, Google Shopping Express, which allows users to get overnight or same-day delivery, is available now in all of Northern California, not just San Francisco.

Analysts by and large were positive on Google's quarterly earnings, with several of them raising their price targets. Here's what a few of them had to say.

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