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Market Update

Google's Gains Backed by Core Search Operations

Google's paid clicks are likely growing faster than the company's number of users, says Morningstar analyst Rick Summer.


 Google (GOOG) announced third-quarter earnings Thursday showing impressive strength in its core search business that was above our expectations, more than offsetting the lack of growth in the business of placing ads on third-party websites. We plan to revise our forecast to account for stronger near-term revenue growth. 

Additionally, as the core search business is more profitable than Google's other segments, we will probably increase our fair value estimate by approximately 10%. Our wide moat rating remains the same.

Rick Summer does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.