Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) is expected to post in line or better revenues compared to the current flattish quarterly projections, helped by strength in mobile, PLAs, display, and Google Play, says a report from J.P. Morgan on 10 April 2014 by analysts Doug Anmuth, Kaizad Gotla and Diana R Kluger. The analysts believe that mobile is the main catalyst of query and click growth, but at the same time is not good for the average pricing.

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Google PLAs beat AdWords text ads

PLAs from Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) are also showing an impressive run as more retailers subscribe to the feature. Checks from the analysts indicate that the PLAs are above similar AdWords text ads in terms of pricing.

In the first quarter, U.S. search growth was healthy, which is evident from the fact that Rimm-Kaufman Group (RKG) has increased its spend on Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) by 17% year over year. Another SEM, iProspect, also suggests robust growth in the first quarter, as the CPCs have risen considerably from the fourth quarter, which analysts believe is a bit unusual considering seasonality. The data from RKG suggests a click growth of 10% year over year and CPC growth of 6% despite pressure on average CPCs owing to lower conversion rates on smartphones.

Initially, the first quarter started weak, but growth accelerated during the quarter, which is similar to the trend noticed in eCommerce over the past few months, note the analysts.

Mobile a primary catalyst for Google

For 2014, search spend is expected to grow by 15%-20% year over year, suggests RKG, which is marginally below its 20% rate in 2013. This year, mobile would be the main catalyst, and SEM expects more focus on mobile tools, cross-device initiatives, and better use of data. Similarly, iProspect also expects a smoother 2014 as Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) is done with the shift from Enhanced Campaigns and an early struggle from mobile CPC monetization.

Mobile accounted for 36% of the total clicks in the first quarter of which the share of smartphones and tablets was equal, according to RKG. However, tablets have a higher conversion rate than smartphones, which is similar to that of desktops.

J.P. Morgan analysts have an Overweight rating on Google with a price target of $675. According to analysts, the sale of Motorola will make Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) “cleaner and more profitable” going forward, and commenting on the shares, analysts, “continue to like Google shares at current levels.”