Google's profits soar in third quarter

20-10-2006

by Emmet Ryan

Internet behemoth Google has almost doubled its quarterly profits, driven primarily by strong advertising revenues.

The California based company, which has its European headquarters in Dublin, recorded profits of USD733 million, or USD2.36 a share, over 90 percent higher than the same quarter a year ago, USD381 million, or USD1.32 a share.

Total revenues were USD2.69 billion for the period ending 30 September 2006. This represents a 70 percent increase on the same period last year and a 10 percent increase on the second quarter of 2006.

Google retained earnings of USD1.86 million for the third quarter after payments to advertisers. Google-owned sites generated USD1.63 billion, up 84 percent on the same period last year, while partner advertisers had revenues of USD1.04 billion generated through Google's Adsense programme.

"Our third quarter results are a testament to the strength of our network of advertisers and partners, as well as our continuing focus on users," said Eric Schmidt, chief executive of Google. "We were particularly pleased with the contributions of our international business in a seasonally weaker quarter. In addition, we continued to forge significant partnerships with companies such as eBay, Fox Interactive Media, and Intuit that will be of great value to all involved."

Revenue from outside the US represented 44 percent of total earnings for the period, compared to 42 percent for the previous quarter.

The announcement of the results follows last week's news that Google is to purchase YouTube for USD1.65 billion strengthening its position in the online video market. Research firm eMarketer expects video advertising online to be worth USD1.9 billion by 2009.

Google employs over 9,000 staff worldwide including over 200 people at its European headquarters in Dublin. The number of staff based in Ireland is set to rise to around 1,000 within the next two years.

Google's strong showing is in stark contrast to Yahoo's third quarter results which saw profits drop 38 percent to USD159 million for the period. Yahoo is launching a new upgrade to their search engine in a bid to compete for a greater share of advertising revenue. Google currently pulls in approximately 25 percent of all online advertising revenue. Yahoo's Project Panama is designed to improve the way Yahoo's search engine matches advertisements to the subject of search queries.