Google (GOOG) Mobile Search Will Eclipse Desktop by 2016

December 17, 2012 11:11 AM EST
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Desktop search accounts for more than half of Google's (NASDAQ: GOOG) consolidated revenue. Needless to say, decelerating desktop ad revenue is a critical concern to investors. Google doesn't breakout is search revenue, but analysts at Evercore Partners parsed Google's search numbers in an attempt create an accurate picture of future sales. The analysis showed that desktop revenue has indeed matured. However, the impact is offset by growth in mobile and display revenue.

"What we found is that desktop search, which we now estimate at a little more than half of Google's consolidated revenues, is indeed showing maturity, which is consistent with our fourth quarter checks and our volume and pricing analysis of the top 100 desktop product search terms. However, display revenues, including YouTube, mobile search revenues, and Nexus are providing outsized growth versus what we had been anticipating," said analyst Ken Sena

He thinks mobile search will eclipse desktop by 2016.

"As such, we view Google's top-line performance as stable in the quarter and years to come. Moreover, favorable display trends and licensing / other (e.g., Nexus) leads us to increase our gross revenues in 2013," concluded Sena.

Evercore Partners has an Overweight rating on Google (NASDAQ: GOOG) with a updated price target of $850.00 (increased from $830.00).

For an analyst ratings summary and ratings history on Google click here. For more ratings news on Google click here.

Shares of Google closed at $701.96 yesterday.

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