Google Inc. (NASDAQ:GOOG) saw its shares hit an all-time high Monday, boosted by investor optimism about the company?s future growth outlook from online advertising revenue.
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The stock reached highs of US$749.43 in afternoon trading, up from a previous record set in November 2007 of $747.24.
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The Mountain View, California-based web giant is seeing increased demand for its advertising products, including search, display and mobile, and investors disillusioned by other social media companies are taking note.
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According to digital advertising research firm eMarketer Inc., Google is expected to become the leader in display advertising in the U.S. this year, including banner ads, replacing Facebook Inc. (NASDAQ:FB).
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eMarketer said it estimates that Google?s U.S. display ad revenue will jump 39 per cent to $2.31 billion this year.
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Google is the world's No.1 search engine, generating $38 billion in revenue last year. Its search advertising business has broadened into display and mobile advertising, which has contributed to Google?s solid and continually growing revenue.
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Despite the rosy predictions and increasing revenue, however, Google still faces challenges.
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In August, the company announced it was cutting 20 per cent of its workforce - about 4,000 jobs - at its cellphone unit Motorola Mobility, and said it would shut about one third of its worldwide offices. About a third of the lost jobs are based in the U.S.
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Google said the move was meant to return Motorola?s mobile devices unit to profitability, after it lost money in fourteen of its last sixteen quarters.
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The Internet search company expects to take severance-related charges of up to $275 million mostly in the third quarter, and the remaining severance-related costs by the end of 2012.
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Google, which agreed to buy Motorola Mobility in 2011 for $12.5 billion, aims to use the phone maker's patents to fend off legal attacks on its Android mobile platform and expand beyond its software business. Android competes against Apple's (NASDAQ:AAPL) iOS platform that is installed in all iPhones.
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So-called "patent trolls" generate revenues through legal challenges made to technology companies from patents they either picked up from defunct companies or have collected over the years.
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Further, Google is facing significant regulatory investigations around the world, including antitrust investigations in the U.S. and in Europe.
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In August, the company agreed to pay $22.5 million to settle charges that it circumvented privacy settings for Apple?s Safari web browser.
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The deal ended a U.S. Federal Trade Commission probe concerning allegations Google used special code to trick the Safari browser enabling the company to monitor users? web habits, even if users had not given permission to do so.?
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Cookies are small pieces of computer text that are used to collect information from computers and can be used to serve targeted ads to consumers.?
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By placing a tracking cookie on a user?s computer, an advertising network can collect information about the user?s web-browsing activities and use that information to serve online ads targeted to the user?s interests or for other purposes.
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The settlement, part of the FTC?s on-going effort to ensure companies abide to privacy promises they make to consumers, marked the largest penalty the agency has ever obtained for a violation of a commission order.
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The company was also required to disable all the tracking cookies it had said it would not place on users? personal computers.
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Google is the subject of a wide-ranging antitrust investigation by the FTC and European regulators over accusations it manipulated search results to favour its own products.
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Shares of the company were ahead 2.01 per cent as at 3:39 p.m. ET, trading at $748.75.
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