Netflix (NFLX) Shares Soar But Google (GOOG) is On Horizon

Shares of online video rental company Netflix, Inc. (Nasdaq: NFLX) surged more than 13% after the company reported that 4th quarter profits were up 36% and revenue was up 23%.

Netflix reported that it earned $31 million, or 56 cents per share, compared with a profit of $22.7 million, or 38 cents per share, for the same period a year ago.

The earnings report included stock compensation expenses, without which profits would have reached $32.7 million, or 59 cents per share.

Although the Netflix's results beat forecasts expecting profits of 49 cents per share, the fact that Google Inc. (Nasdaq: GOOG) is moving into the online video market should be cause for concern among investors interested in the Netflix stock.

Google announced recently that it is planning a video rental trial run through its YouTube subsidiary. If Google commits to entering the online video market, Netflix will be in serious trouble.