Google shares surge as investors see hope in mobile-ad business

Google shares skyrocketed on Friday after stockholders expressed hope that the company's efforts in mobile advertising are starting to pay off.

Google shares surged nearly 15 percent to $664.88 on Friday after shareholders got their first chance to trade the company's stock after stellar second-quarter results were released. Google announced after trading hours on Thursday that revenue hit $14.35 billion during the quarter and profit had hit $6.99 a share.

The surge in stock price suggests investors believe Google may have finally turned a corner in its mobile-advertising business, which has been a shaky area for the Internet giant. Google's search engine is still the most dominant on Earth when it comes to desktop computers, but the company has been facing mounting competition as people increasingly use smartphones and tablets. The smaller screens on those devices have pushed consumers to consider other apps for searching -- like going to Amazon when looking for shoes -- instead of going straight to Google.

In a study published in April, the Interactive Advertising Bureau analyzed the popularity of ad formats across search, mobile and digital video, among others. The company found that between 2013 and 2014, mobile-advertising spending was up 76 percent to $12.5 billion. While search was still the top destination for advertising dollars, grabbing 38 percent of the market, it was down from 43 percent share in the prior year.

The look at interactive-ad sales was followed in May by a report from ad agency Opera MediaWorks, which found that in the first quarter of 2015, Android's share of mobile-ad revenue reached 45.8 percent. It was the first time marketers spent more of their ad dollars on Android than iOS, despite Google's platform holding a dominant position in worldwide market share.

All of that has not gone unnoticed by Google shareholders and analysts, who have been calling on the company to beef up its mobile efforts. While desktop search and display ads are still the most popular destinations for marketers, critics have argued that Google is not well-prepared to maneuver into a similarly dominant role in mobile.

Google was quick to acknowledge its gains in mobile during the second quarter. In a call with investors, Google CFO Ruth Porat said that "the gap is narrowing" between the company's ad sales on desktops and mobile. The company also insisted that it hasn't fallen behind in mobile and pointed to growth in usage of its Android operating system, its YouTube video service viewership on smartphones and tablets, and downloads from its Google Play app marketplace, as signs that it's going in the right direction in mobile.

For now, shareholders seem to be willing to see how things play out: The rapid surge in Google's shares sent the company's market capitalization -- a measure of its total value -- up $52 billion at one point on Friday.

Google did not immediately respond to a request for comment.