Google Shines Although Economy Dims
Internet search king Google seems little affected with the burgeoning economic losses. Though most of the companies have taken a back-seat in their profit performance, Google held its head high with strong third quarter profits, successfully beating the expectations of Wall Street analysts.
While net profits registered a 26% growth in Q3 to $1.35 billion, revenues rose 31% to $5.54 billion from the same period previous year. As against the forecasted diluted earnings per share (EPS) of $4.76, Google reported EPS of $4.92.
Eric Schmidt, chief executive of Google Inc. held the company’s underlying strength of its core search and ads business responsible for achieving a good third quarter with strong traffic and revenue growth across all its major geographies. He stated that Google will invest in future growth areas like enterprise, mobile and display, along with driving improvements to search and ads.
Schmidt, in a conference hall, said that the Mountain View, California based internet firm continued to hope to conclude an advertising agreement with Yahoo. This would let Google technology function in an effort to target search ads on Yahoo’s Web pages.
However, due to anti-trust concerns over an advertising tie-up between the top two internet ad giants, the agreement is being reviewed by the US Department of Justice currently.
Schmidt commented that several of the complaints come from the lack of understanding of people regarding how auctions work actually.
On the other hand, Allen Weiner, an analyst at Gartner, stated that Google was nicely positioned for the remainder of the year, even without the advertising deal with Yahoo. He believes that the company seems to be well prepared for whatever that takes place, and suspects that it will continue reaping profits in the fourth quarter as well, in spite of a recession.
Weiner said that he expected YouTube, a well-known video-sharing social networking site to help Google make money eventually. It was just a couple of years ago that Google bought YouTube for $1.65 billion, and Weiner, on noticing Google’s innovation on YouTube said that the company is just starting to scratch the surface on how could it be monetized.
Google said that its revenue from the company-owned Web sites, two-thirds of entire revenue, was $3.67 billion in Q3, up 34% from last year’s same period. It stated that revenue from Google partner sites via its AdSense programs was an impressive $1.68 billion, contributing to 30% of the revenue and up 15% from the same period previous year.
Interestingly, Google also said that 51% of its total revenue in Q3 was generated from outside US, totaling to $2.85 billion.
