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Tuesday, Jan 22, 2013 11:30 AM UTC

Ahead of the bell: Google’s 4Q to give ad insights

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Topics: From the Wires,

SAN FRANCISCO (AP) — Google’s fourth-quarter earnings report should provide a barometer on how much more advertising shifted to the Internet during the holiday shopping season.

The results, due out after the stock market closes Tuesday, will also give investors a better sense on how the growing popularity of smartphones and tablet computers is affecting the prices in the digital advertising market.

Advertisers so far haven’t been willing to pay as much to market their wares on mobile devices as they are on laptop and desktop computers because of the disparity in screen sizes. That factor has been cited as the main reason why Google’s average ad prices have fallen from the previous year for four consecutive years, a streak that analysts believe will be extended when the company breaks down its results for the final three months of last year.

Despite the downturn in ad prices, Google’s earnings have still been rising because the total number of clicks on the ads has been steadily climbing. Most of Google’s advertising deals call for the company to get paid by the click.

Comparisons to Google’s fourth-quarter performance in the previous year will be muddied by the company’s $12.4 billion acquisition of Motorola Mobility Holdings, which was completed eight months ago. Motorola has been losing money, so it will likely lower Google’s fourth-quarter earnings compared to 2011 while boosting the total revenue substantially higher.

To complicate matters further, Google last month agreed to sell a Motorola division that makes cable-TV set-top boxes for $2.35 billion. Although the deal won’t be completed until later this year, Google says accounting rules require the company to classify the set-top box division as a discontinued operation that doesn’t count in the fourth-quarter results.

Google Inc. suspects most analysts who follow the company still included the set-top box division when they were drawing up their fourth-quarter projections. If that’s true, the analyst forecasts that steer investor expectations could be envisioning substantially more revenue than Google will report.

In the third quarter of last year, the set-top box division generated an operating profit of $25 million on revenue of $797 million

Analysts, on average, foresee Google earning $10.57 per share on revenue of nearly $12.4 billion, according to a survey by FactSet. The earnings projections subtracts Google’s expenses for employee stock compensation and the revenue forecast reflects how much the company has left after paying commissions to its advertising partners.

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  • The protests take on a festive element as police forces move out of the park and square. Wearing a gas mask, this young man dances to traditional Turkish music in front of Taksim Square’s Ataturk Monument.

  • In Gezi Park since March 31st, this protester, originally caught off-guard by the Government’s teargas and water cannons, went out and bought a Russian army mask from WWII, preparing for what was to come.

  • This rambunctious boy seems to be enjoying the chaos. After taking this picture he threw a stone at the already destroyed building in the background.

  • Forming a line, the police face off directly with protesters in Taksim Square. After a while, they retreated and there was a general cheer – a back-and-forth dance that has been common since the beginning of this protest.

  • An elderly woman in Gezi Park reads the news. The tent community occupying the park was violently destroyed on June 16th.

  • Many different groups had set up booths to promote their cause in Taksim Square and Gezi Park. Standing in front of one, this man waves his flag while posing with conviction.

  • Many home-remedies are used to minimize the effects of tear gas. This woman has put a milky solution on her face, removing her mask after the tear gas dissipated. Before sunrise, the police came again for another round of teargasing.

  • People capitalize on the uprising -- selling flags, beer, gas masks, sky lanterns and spray paint to name just a few of the popular items.

  • On Monday morning, June 11, the police execute a strong offensive. Many plain-clothed police officers, like the ones seen here, clash with protesters in the side streets away from the main stand-off in Taksim.

  • The authorities seem to be most aggressive in the night, pushing protesters away from the square and park. After being teargassed this young woman catches her breath with other protesters on Siraselviler Street.

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