Mountain View, California-based Internet search leader Google today announced strong earnings led by first  quarter gross revenue of $5.19 billion, exceeding forecasts with an increase of 42 percent over the same quarter in 2007, and an increase in net profit of 31 percent, results that are likely to help ease recent Wall Street concerns that Google has become more susceptible to the economic downturn. Google reported revenue for the quarter ending March 31, 2008 that rose 7 percent from a fourth quarter revenue total of $4.83 billion, and was the company's first earnings report since acquiring online advertising firm DoubleClick for $3.1 billion. Google said the effect of its DoubleClick acquisition were slight, and "immaterial to revenue and only slightly dilutive" to Thursday's strong income and earnings figures. CEO Schmidt Sees DoubleClick Opportunities "Our ongoing innovation in search, ads, and apps helped drive healthy growth globally across our product lines, yielding another strong quarter for Google," said Google chief executive Eric Schmidt. "As we integrate DoubleClick into our advertising platform, we see exciting new ways to improve the user experience and increase value for our advertisers and partners. Also, while exercising operational discipline, we continue to explore opportunities that add value to users everywhere and to Google in the long term," Schmidt added. The strong earnings report is also likely to help allay concerns among some analysts that Google has been struggling with pay per click (PPC) and other online advertising performance, fed by recent reports from Web traffic analysis firms comScore and Hitwise. Google has reported first quarter growth of 20 percent in its paid clicks in the United States market over the same period in 2007, a figure down notably from the firm's 30 percent growth during the fourth quarter and 45 percent during the third quarter of 2007. Revenue Growth Beats Expectations Analysts have made the case that the PPC slowdown seem at Google results from initiatives the firm has taken to remove certain poorly performing advertisers. The Web search leader said Thursday that its net income during the first quarter climbed $4.12 per diluted share to  $1.31 billion, from figures of $3.18 per share and $1 billion during the same quarter in 2007. The average of forecasts from Wall Street predicted profit of $4.53 per share, according to Reuters Estimates research, which Google handily exceeded with first quarter profit of $4.84 per share taking into account stock option expenses and non-recurring items. While not matching the 63 percent first quarter revenue growth Google saw in 2007, the 42 percent reported Thursday was ahead of analyst estimates of some 40 percent. Google Reports Strong First Quarter Earnings Exceeding Forecast Google reported Web traffic acquisition costs of 29 percent of its total advertising revenue during the first quarter, down slightly from the same quarter in 2007 when its figure stood at 31 percent. Excluding affiliate commissions Google paid out, revenue climbed 46 percent to $3.7 billion, according to the Google earnings report. Thursday's earnings report showed an increase in Google revenue coming from countries other than the U.S., where the firm now brings in the majority of its earnings, at 51 percent, up 4 percent from the same quarter during 2007, which may have played a part in helping it weather a struggling U.S. economy. Google Stock Price Climbs In After Hours Trading Google reported that it is nearly the 20,000 employee mark, having added 2,351 DoubleClick workers in its March acquisition, bringing the company total to 19,156 employees. 500 of Google's original 2,300 pre-initial purchase offer (IPO) employees, of which 900 became instant millionaires when the company went public, have reportedly sold their stock options and left the company. In January when Google released its third quarter results it did not meet analyst expectations, despite sales that saw growth of 51 percent, which will likely make Thursday's first quarter results, which topped forecasts, appear even stronger. Investors were quick to react to the release, and after Google shares closed Thursday down $2.16, or 0.47 percent, at $452.87, they quickly climbed more than 11 percent to over $500 in after-hours trading after the earnings report was released. Related Links:
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9:57 pm on April 17, 2008 (utc 0)
