Google beats expectations as profits jump 36%

Shares go up 10% in after-hours trading on news of figures from Larry Page’s first full quarter as chief executive Google defied analysts’ forecasts with second-quarter earnings up 36% year-on-year to $2.5bn (£1.5bn) and revenues up 32% to a record $9.2bn in co-founder Larry’s Page’s first full quarter as chief executive. Wall Street, which three months ago marked the company’s shares down over fears that it was losing control of costs, pushed its shares up 10% to $581 in after-hours trading. Page, who ran the company for its first three years until 2001, when Eric Schmidt took over, said in a statement that “we had a great quarter … I’m super excited about the amazing response to Google+ [its new social network intended to compete with Facebook] which lets you share just like in real life.” After subtracting Google’s advertising commissions, its retained revenue stood at $6.9bn – nearly $400m above analyst projections. Google fared so well because advertisers were willing to pay higher prices to promote their products on the internet’s largest marketing network. The average price paid per advertising click on Google’s network rose 12% from last year. Internet users clicked on ads 18% more than they did at the same time last year. Google is tightening its grip on search and advertising, pulling ahead of Microsoft, which has been consistently losing money in its Bing search business since 2005. Jordan Rohan, an analyst at Stifel Nicolaus, said: “Google should be viewed as a growth company again this quarter. This is well beyond expectations from Wall Street. Clearly, the combination of mobile search, Android, ad exchange, YouTube, and the core search businesses, they’re all doing well. Google is no longer a one trick pony. You might say six trick pony if you count Google+.” Page delivered the impressive results while vowing to bring in more engineering talent and investing heavily in more data centres so that Google can keep expanding into new fields. Google’s newest venture, Google+, debuted two weeks ago and has grown quickly. But the company still faces difficult questions in the longer term over a number of outstanding patent fights in the courts relating to its Android smartphone operating system. Although Android phones now have the largest share of smartphones worldwide, Oracle is suing it for up to $6.1bn for infringements of its Java code, while Microsoft has sued a number of mobile handset makers claiming that their Android phones infringe its patents. So far it has signed up five companies which are paying a per-handset fee of about $5. Google added 2,452 employees in the second quarter, including 450 workers inherited as part of the company’s $700m purchase of airline fare tracker ITA Software. Google United States Internet Larry Page Search engines Technology sector Charles Arthur guardian.co.uk

Posted by on July 14, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.