Google profits rise
Google said it earned $4.66 per share in the quarter ending June 30, up from $3.92 per share, or a total of $1.25 billion, in the same quarter last year.
The search engine giant said its net revenue for the quarter rose to $4.07 billion as compared to $3.9 billion the same period in 2008.
“Google had a very good quarter, especially given the continued macro-economic downturn,” chief executive Eric Schmidt said in a release.
“These results highlight the enduring strength of our business model and our responsible efforts to manage expenses in a way that puts us in a good position for the economic upturn, when it occurs.”
Google reported that “paid-click” advertising was 15% higher than in the same quarter last year, down two percent from last quarter, but Schmidt said the company’s advertising business appears to have stabilised.
“We are not looking at the downward spiral we were seeing six months ago,” he said during an earnings conference call.
“It is too early for us to tell when the recovery will materialise. I wish we could just prove it. The recovery will eventually come; it always comes.”
Schmidt said the money brought in by Google-owned YouTube has tripled in the past year and the service could be “a really profitable business in the not too distant future”.
“YouTube is now on a trajectory we are very pleased with,” he added, though Google has yet to see any profit from the video-sharing site, which it bought in 2006 in a stock deal valued at $1.65 billion.
Schmidt said Google will continue to invest in developing new enterprises, including its recently-announced open-source Chrome OS operating system project, which could challenge Microsoft’s ubiquitous Windows software.
The company plans to target Chrome OS at netbooks, providing users of the low-cost computers with fast, powerful connections to the Internet.
It is also in talks with computer hardware makers who may develop complementary products for the system.
Chrome OS will be free, with Google expecting to cash-in on people invariably using its services and clicking on its online ads.
“We have ways we plan to make money from it,” Schmidt said. “We look at it strategically … getting more people online ultimately results in revenue growth for us.”
As it spends money on development, Google has also cut back spending in other areas, protected its cash reserves and ended the quarter with fewer employees despite continued hiring.
The company ended June with 19 786 employees, down from 20 164 at the close of the previous quarter, after it cut staff in marketing and sales.
Google stock dropped more than three percent to $427.80 in after-hours trading after the release of the earnings report.
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