Google announced better-than-expected third quarter results and emphasised the strong role that mobile is playing across its business.

“I think we’re very well positioned in mobile,” noted Larry Page, CEO, while reiterating the fact that over 1 billion Android devices have now been activated worldwide and 1.5 million new devices are switched on each day. Page also revealed that 40 per cent of YouTube’s traffic now comes from mobile, up from 6 per cent two years ago.

“We have the potential to really improve people’s experience as they move more into mobile and spend more time there and to make those experiences much more efficient and pleasurable and beautiful for those users,” he stated on an analyst conference call.

And mobile is helping offset an 8 per cent fall in the amount of money Google receives every time someone clicks on an advert (‘cost-per-click’). A surge in mobile usage meant that more people were clicking on the adverts overall, with the number of so-called ‘paid clicks’ jumping 26 per cent in the quarter from the same period a year ago.

“That’s the key story, their ad volume growth is outpacing the decline in cost-per-clicks,” JMP Securities analyst Ronald Josey told Reuters.

The company’s SVP and chief business officer, Nikesh Arora, provided further detail on the impact mobile is having at Google: “Mobile is driving higher online conversion. American Apparels found that mobile ads were actually driving 16 per cent more conversions than they initially thought and as a result they’re now investing more to drive more sales. Second, mobile drives more phone calls. On average there are more than 40 million calls driven by Google ads every month, this is twice as much as it was a year ago. Third, mobile drives in-store traffic.”

Total third-quarter revenue at Google was up 12 per cent year-on-year to $14.89 billion, compared with a $14.79 billion average analyst estimate. Profits soared 36 per cent to $2.97 billion – well ahead of analyst forecasts.

The one black spot was the performance of its Motorola Mobility handset unit, which saw operating losses widen by 29 per cent to $248 million, despite deep cost-cutting measures. Page urged investors to be patient about the mobile manufacturer’s performance, insisting that the wider company was positioning itself well for the long term.

The strong results saw Google’s stock approach the ‘exclusive’ $1,000-a-share club, with the stock trading as high as $960.21 at one point last night (up 8 per cent).