Holiday boost from online ads earns Google US$2b in profit
By Michael Liedtke |
January 23, 2010, Saturday
|
Print Edition
Print Edition
GOOGLE Inc reeled in more Internet advertising during the holiday shopping season and approached US$2 billion in quarterly profit for the first time, providing the strongest sign yet that the online search leader has shaken off the recession's doldrums.
The fourth-quarter earnings announced on Thursday topped analyst estimates, but revenue only matched forecasts.
Google made US$1.97 billion, or US$6.13 per share, in the final three months of 2009. That was up dramatically from income of US$382 million at the same time in 2008, when Google's earnings were deflated by charges to reflect the eroding value of some investments.
Fourth-quarter revenue totaled US$6.7 billion, a 17 percent increase. The revenue was also up by more than 10 percent from the previous quarter, the first time Google's sequential growth has climbed by double digits since the United States recession began in December 2007.
"Given that the global economy is still in the early days of recovery, this was an extraordinary end to the year," said Eric Schmidt, Google's chief executive.
The quickening growth pace indicates Google is regaining the pre-recession stride that enabled the company to consistently increase its quarterly revenue by at least 30 percent. Google is so large now that it will be difficult to get back to that level, but analysts still think revenue could rise by nearly 20 percent this year -- up from 9 percent for all of 2009.
The brightening outlook has encouraged Google to loosen its purse strings to hire more employees, make more acquisitions and mine new business opportunities such as mobile phones.
Investors aren't thrilled with that commitment because Google won't say how much it's prepared to spend, raising worries that its profit margins might not expand as much as its revenue this year.
Google added 170 workers in the fourth quarter, bringing its payroll to 19,835 employees. If it can find enough qualified candidates, Google would like to hire about 2,000 workers this year, with an emphasis on engineering and ad sales, said Patrick Pichette, the company's chief financial officer.
Schmidt also told investors that the company will likely make at least one acquisition per month, "some big, more small." The company's biggest pending acquisition is a proposed deal to buy AdMob, a mobile advertising service, for US$750 million.
Google's fourth quarter could indicate the overall online advertising market is regaining its vigor.
The fourth-quarter earnings announced on Thursday topped analyst estimates, but revenue only matched forecasts.
Google made US$1.97 billion, or US$6.13 per share, in the final three months of 2009. That was up dramatically from income of US$382 million at the same time in 2008, when Google's earnings were deflated by charges to reflect the eroding value of some investments.
Fourth-quarter revenue totaled US$6.7 billion, a 17 percent increase. The revenue was also up by more than 10 percent from the previous quarter, the first time Google's sequential growth has climbed by double digits since the United States recession began in December 2007.
"Given that the global economy is still in the early days of recovery, this was an extraordinary end to the year," said Eric Schmidt, Google's chief executive.
The quickening growth pace indicates Google is regaining the pre-recession stride that enabled the company to consistently increase its quarterly revenue by at least 30 percent. Google is so large now that it will be difficult to get back to that level, but analysts still think revenue could rise by nearly 20 percent this year -- up from 9 percent for all of 2009.
The brightening outlook has encouraged Google to loosen its purse strings to hire more employees, make more acquisitions and mine new business opportunities such as mobile phones.
Investors aren't thrilled with that commitment because Google won't say how much it's prepared to spend, raising worries that its profit margins might not expand as much as its revenue this year.
Google added 170 workers in the fourth quarter, bringing its payroll to 19,835 employees. If it can find enough qualified candidates, Google would like to hire about 2,000 workers this year, with an emphasis on engineering and ad sales, said Patrick Pichette, the company's chief financial officer.
Schmidt also told investors that the company will likely make at least one acquisition per month, "some big, more small." The company's biggest pending acquisition is a proposed deal to buy AdMob, a mobile advertising service, for US$750 million.
Google's fourth quarter could indicate the overall online advertising market is regaining its vigor.
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