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Business

Google post second quarter profits of 1.48 billion dollars

©

Text by NEWS WIRES

Latest update : 2009-07-17

Internet search engine giant Google has posted second-quarter profits of 1.48 billion dollars compared with of 1.25 billion dollars a year earlier. Net revenue for the quarter was also up despite the economic downturn.

AFP - Google reported on Thursday that its second-quarter profits climbed to 1.48 billion dollars despite stark global economic conditions.

Google said it earned 4.66 dollars per share in the quarter ending June 30, up from 3.92 dollars per share, or a total of 1.25 billion dollars, in the same quarter last year.

The search engine giant said its net revenue for the quarter rose to 4.07 billion dollars as compared to 3.9 billion dollars 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 percent 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 stabilized.

"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 materialize. 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 dollars.

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 dollars in after-hours trading after the release of the earnings report.

Date created : 2009-07-17

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