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Google is set to report fourth-quarter earnings on Tuesday and investors will be particularly focused on strength in the company’s Android operating system and mobile business.

Analysts are expecting the company to report earnings of $10.58 per share on revenue of $12.3 billion, according to First Call.  Google shares fell over 10 percent following its third-quarter earnings results miss of $9.03 per share, compared with analyst expectations of $10.65.

Investors will be looking at results in Google’s mobile business, specifically its run-rate. In the third-quarter, the company said its mobile advertising run-rate grew $2.5 billion from a year ago to $8 billion, which included revenues from sales of Google Play mobile content and revenue from spending on Play apps.

In the third-quarter, Google said that the rate of activation of Android devices had reached 1.3 million per day and that over 500 million Android devices had been activated.  Investors will be looking for that kind of growth in the fourth-quarter as Google’s ad revenue depends on the number of devices in use.

Investors will also be looking for any hint about how well the Nexus 7 tablet fared in the fourth-quarter.  Surprisingly, Google hasn’t officially released any figures on its Nexus 7, but the company is estimated to have sold between 800,000 and one million of the tablets during the third quarter, according to Piper Jaffray analyst Gene Munster.  While the Nexus 7 trails Apple’s iPad in the U.S., the Nexus 7 has gained significant traction in Japan, nabbing 44.4 percent of the market compared with 40.1 percent for the iPad in December.

Google Plus, the company’s social network, will also be in the focus. With more than 135 million active users, Google Plus is starting to gain some ground, but still has a long way to go to compete with Facebook and Twitter.


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