SAN FRANCISCO – Google introduced a subscription music-streaming service, one of several product updates to be unveiled at a developer meeting this week as the search provider seeks to attract more users and advertisers.
Predictions that the company would discuss the music service – as well as other new products, such as revamped mapping software – at the Google I/O conference Wednesday helped lift the shares past $900 to a record. The stock is also getting a boost from an increased price target to $996 from $932 by Morgan Stanley analysts.
Google is showing off upgrades to products such as the Android mobile operating system, Glass computing spectacles and Chrome browser, as the world’s most popular search engine seeks to boost the appeal of its services. The YouTube online-video service could grow into a business with $20 billion in sales by 2020, according to Morgan Stanley.
As in prior years, we expect news coming out of Google I/O should move the stock, but this year’s impact may be more muted, Brian Pitz, analyst at Jefferies & Co., wrote in a research report Wednesday.
Shares of Mountain View-based Google rose 2.4 percent to $909.34 at 12:57 p.m. in New York, the highest since the company’s initial public offering in August 2004. The stock has advanced 25 percent this year through Tuesday, compared with a 16 percent gain in the Standard & Poor’s 500 Index.
Google rose 2.7 percent during three days at the 2012 I/O conference and the impact this year should be positive, said Pitz, who has a buy rating and a $1,000 target price for the stock.
By offering music, Google is seeking to give consumers more reasons to use the Android operating system, already the most widely used software in smartphones.
Google’s All Access music service will cost $9.99 a month, making millions of songs available on Web browsers as well as mobile devices, the company said at Wednesday’s conference. Universal Music Group, Sony Music Entertainment and Warner Music Group have reached agreements to license songs, according to people with knowledge of the matter, who asked not to be identified because the details weren’t public.
Apple, maker of the iPhone, is also planning a music service.