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Internet search and advertising giant Google has reported skyrocketing financial increases for the third quarter ending on September 30, 2007, further increasing the sizable lead it has had on rival competitors such as Yahoo and Microsoft.  In an online advertising market seeing steady gains, Google stands far clear of the nearest challenger with growth rates twice that of the category average. In the past month alone shares of Google stock have increased by over $100. Compared with last year's third quarter performance Google's net income has increased by 46 percent. Although Wall Street has placed formidable sales goals in front of Google, forecasts were surpassed with the whopping 57 percent increase in sales the company achieved during the third quarter. Google is growing at a rate considerably more than any other major Internet firm. A look at Google's financial release reveals impressive performance. Making Sense of Google's Growth A year ago Google's third quarter net income was $733 million, a $2.36 gain per share, while this year the gain has been $1.07 billion, a $3.38 per share increase. Google's total net revenue rose to $4.23 billion, a 57 percent increase from last year's third quarter performance and a nine percent increase compared to the company's performance last quarter. This outpaces industry forecasts which had predicted $4.13 billion in revenue. Measuring revenue without the commissions advertisers receive results in a $3.01 billion total, nearly $70 million more than industry predictions. Profit has been reported at $1.24 billion, a $3.91 gain per share when items such as stock-based compensation is set aside, and this represents a gain beyond even the $3.71 per share predicted by analysts. This 46 percent rise in profit shows the continued strength Google has in the Internet search and advertising market. Company shares have risen rapidly peaking at $641.41 last week, and while overall NASDAQ stock growth for 2007 is at 16 percent, Google has seen a 39 percent increase. Shares in Google first topped the $600 mark on October 8th, and now the $700 barrier appears to loom closer with each day of trading. Google spent 30 percent of its revenue for operational expenses which totaled $1.25 billion during the quarter. Since its August,  2004 initial public offering Google has outpaced analyst estimates in 11 of 13 quarters, which has resulted in the company's stock price experiencing more than a sevenfold increase when taking the newly released figures into account. Nearly half of Google's revenue came from international business. Douglas Anmuth, an analyst with Lehman Brothers, is quoted in a recent New York Times article as seeing impressive performance at Google. "The gap is widening as they continue to dramatically outperform competitors," Anmuth said. Google CEO Eric E. Schmidt told analysts that the quarterly report is especially good considering the traditionally more modest gains the company has seen during previous third quarters. "We are very pleased with such strong results in what is seasonally one of our weaker quarters. It is obvious to us that our model continues to work very well," Schmidt said during a conference call with analysts. Additional Employees Added During the third quarter Google added 2,130 employees placing the firm's total number of workers at 15,916. Earlier in the year Google had said that it planned on slowing its hiring rate to quell investor concerns over rising company expenses, so the 2,000 plus additional employees come as a minor surprise. Google added 300 of the employees during its acquisition earlier this year of e-mail management company Postini. Another 1,000 or so of the figure are, according to Google, recent college graduates many of whom had already accepted positions with the company earlier in the year but began working during the third quarter reporting period. Schmidt noted that Google is keeping an eye on their employee growth rate. "The numbers that you are seeing are essentially an overhang. Going forward you should be comfortable that we are paying attention to the head count," Schmidt said. Behind the Growth Google increased its market share in the U.S. Web search business from 56.5 percent in August, 2007 to 57 percent in September, according to Internet traffic measurement firm comScore. In the global market Google's share is an even more impressive 70 percent according to the latest measurements. Rivals Not Faring as Well In the shadow of Google's continued success rivals such as Yahoo have not fared as well, witnessed by Yahoo's Tuesday announcement that year-over-year quarterly earnings have declined by five percent, although overall revenues have risen by 12 percent. Industry analysts are expecting Google's growth to be at 47 percent during the fourth quarter, which would be nearly five times faster than that of Microsoft and Yahoo. Google's Ambitions Google has openly expressed interest in next year's government auction of a segment of wireless spectrum, which the company has noted it may bid $4.6 billion or more to obtain. Additionally, Google's $3.1 billion acquisition of online advertising firm DoubleClick will, if approved by government regulators, expand on the company's growth in the area. Other plans at Google seem to include expanding mobile service both by selling ads on cell phones and possibly through offering a cell phone of its own. The company has also increased its efforts to gain revenue through an advertising system added to its YouTube service. Schmidt sees the television advertising market as an exciting possibility as well. "Television is one area that looks like it is going to grow very quickly," Schmidt said in an interview with news agency Reuters. Google's Trouble Spots Percentage-wise Google's growth rate is down from the 96 percent figure seen during the same period in 2005 and the 70 percent observed in 2006, however those astronomical rates might be impossible for any firm of Google's present size to continue.  Google Growth Pace Quickens Google has said that it will continue spending to built new networks and data centers, at the rate of roughly $500 million per quarter. As Google rolls on with impressive growth rates and profits, plans to expand on existing technologies and enter into new ones including television, radio and print advertising lead one to wonder just how large the company can become. Next Wednesday Google plans to hold a meeting with Wall Street analysts at its headquarters in Mountain View, California. Related Links: Recent Videos:
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6:39 pm on Oct. 20, 2007 (utc 0)