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Three reasons to keep your eyes on Google

Investors will be eyeing Google's mobile strategy this week. REUTERS/Brendan McDermid


During the past month, as rivals such as Apple and Research In Motion dominated headlines in the technology world with both good and bad news, Google has remained relatively quiet. This week, the company takes the spotlight.

The Mountain View, Calif., firm behind the world's most popular search engine reports its third-quarter earnings results on Thursday. And although investors will still keep a close eye on how well the company is doing in its core business of selling ads, most of the interest will be on Google's burgeoning mobile device strategy.

1. Android outlook

Even though Apple still rakes in the biggest share of profits from the sale of next-gen smart phones and tablets, phones running on Google's Android operating system now make up the biggest segment of the lucrative North American market. That's in large part because Google has made it very cheap for third parties such as Sony, HTC and Samsung to use the software. The strategy is similar to Microsoft's in the early 1990s, when the company managed to destroy Apple's market share in the home computer market by offering Windows as a cheap alternative.

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But the strategy comes with obvious risks. Investors will be listening closely on Thursday to hear whether Google's Android is starting to make a difference to the bottom line. The answer to that question may come in the form of increased ad revenue, if Google can show that an increased software presence on smart phones is translating to more Google ad clicks.

2. Patent suits

Investors will also be very curious for updates to Android-related court proceedings. The software is currently the subject of dozens of patent infringement lawsuits around the globe. Some of those lawsuits will likely see Google's most senior executives, including former CEO Eric Schmidt, called in to testify. More importantly, the results of those cases could determine whether Android devices are banned outright in certain markets – a potentially disastrous outcome for Google.

3. Hardware plans

Finally, the company may give additional guidance as to its plan to purchase handset-maker Motorola Mobility. When Google first announced its $12.5-billion (U.S.) bid, many observers speculated the move was a patent play, allowing Google to take advantage of thousands of Motorola patents to better defend itself in court. However, the company may also be planning to take its Android strategy to the hardware arena, using Motorola to release ultra-cheap smart phones in the hope of growing Android's market share. Any such move would likely have a huge impact on the mobile device industry – and Google's share price.

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