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Despite Hefty Earnings Report, Analysts Still Wonder If Google Is A One-Trick Pony

Who said Google lost its mojo? Walloping Wall Street expectations for the third quarter, analysts, investors, and media types spent late Thursday and early Friday heaping praise on the search giant.

   "This is the best performance they've had in three years ... We're back to the old Google we know and love," RBC Capital Markets analyst Ross Sandler told Reuters. "Clearly search is holding up better than anyone expected."

According to the Los Angeles Times, the strong performance should assuage investor concerns that Google has become overly distracted by far-flung pursuits like renewable energy, automated cars, and even mobile. "Windmills? Driverless cars?" the paper asks. "Let Google do whatever Google wants."

Likewise, the impressive showing "shows that the investments that management is making, like the ones that they made in the past, ... are bearing fruit," Kaufman Brothers analyst Mayuresh Masurekar told Reuters.

Still, despite the hefty earnings, "That doesn't mean that questions still don't linger about the company going forward," according to TechCrunch. "Namely, how are they going to make money off of something besides text-based search advertising?"

Well, in a rare disclosure, Google said it was now doing $2.5 billion of "non-text" revenue, and $1 billion of mobile revenue -- numbers that were apparently not enough to impressive everyone.

"Google's still very much a one-trick pony," insists Business Insider's Henry Blodget. "The $1 billion of mobile revenue is still 'search' revenue--not some huge new revenue stream," while, "The '$2.5 billion of non-text revenue' is less than 10% of Google's total revenue, which is now ~$30 billion."

Also of note, "Google likely passes at least 50% of its $2.5 billion of non-text ad revenue through to content partners," Blodget adds.  "This means that, on a 'net revenue' basis, Google's non-text ad business generates only $1-$1.25 billion of revenue, or only about 5% of Google's total revenue."

"All of those seem big--and they are!" writes MediaMemo. "But they're also deliberately fuzzy enough that it's hard to tell exactly what they mean ... No matter! The point of b-as-in-big numbers was to impress Wall Street with Google's ability to create new revenue streams beyond its core search ads."

As far as Mercury News is concerned, "The numbers suggest Google is starting to gain traction outside its primary business of selling text ads tied to Internet searches."

What's next the digital darling? As eWeek notes, "The company has $33.4 billion in the bank, a princely sum that has caused some market watchers to call for Google to acquire Twitter, which could cost $5 billion."

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