SAN FRANCISCO: Google profit jumped in the recently ended quarter, but the leap fell short of market expectations as smartphone-centric lifestyles brought with them a shift to cheaper mobile ads.
Google shares whipsawed, losing ground and then gaining, as Wall Street came to grips with concerns about a shift to lower-cost ads on mobile devices and the technology titan's penchant for spending on "moonshots" like self-driving cars and Internet-linked Glass eyewear.
"At Google you have strong-willed leaders who tell shareholders they are interested in the long haul and want to invest in interesting long-term projects," said Forrester analyst Frank Gillett.
"I personally like the willingness of a company to swing for the fences, but it is not popular with Wall Street traders, to say the least."
Lifestyles are shifting from using laptops or desktop computers to get online to using smartphones or tablets in what Forrester refers to as 'the mobile mind shift,' according to the analyst.
Google has prospered on targeting ads served up with Internet search results on computers.
"As people increasingly embrace the power of the smartphone, they are using Internet search engines less and using apps more," Gillett said.
"It is a gradual shift but it is a profound one because it changes how Google reaches people; the whole model is shifting."
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