Google enjoys a small rebound in the second quarter, posting a profit of $1.48 billion on $4.66 per share, a 19 percent growth over the second quarter of 2008. Google CEO Eric Schmidt says Google is focused on innovation with the Google Chrome OS and the core search engine; these are two big weapons the search engine giant is wielding against Microsoft's Windows operating system and Bing search engine.
Rebounding from a lackluster first quarter,
on July 16 Google reported a second-quarter profit
of $1.48 billion on $4.66
per share, a 19 percent growth over $1.25 billion in profit on $3.92 per share
from the second quarter of 2008.
The search engine giant, which is fending off renewed competition from
Bing search engine, reported sales of $5.52 billion
for the second quarter, an increase
of 3 percent from the year-ago quarter. Earnings, excluding special items, were
$5.36 a share. Thomson Reuters analysts had expected Google to notch earnings
excluding special items of $5.09 a share and $4.06 billion in net revenue.
The second-quarter profit and revenue growth marks a small turnaround for
the company, which reported $5.51 billion in sales for the first quarter, a 3
percent decline from fourth-quarter 2008 revenues of $5.70 billion.
CEO Eric Schmidt said on a
conference call that Google's business appears to have stabilized and the
company had a good quarter despite the weak economic environment.
Consumers, he claimed, are using search to find deals on e-commerce goods.
Schmidt added that Google's business model and steps to manage head count
put the company in "a good
position for the economic upturn, when it occurs."
He also promised the company would not stop innovating during the downturn,
pointing to the recent announcement of Chrome OS
for netbooks as an attempt to "rethink
what an operating system should be," a clear shot at Microsoft's Windows
operating system. "We need faster operating systems in the same way we
need faster browsers. People are now doing everything on the Web."
That wasn't Schmidt's only allusion to Microsoft. Schmidt also pointed to
search as an important area for innovation, a hint that Google is aware of Bing's presence
in the minds of many analysts and pundits
waiting to see if users make the leap. So far, most have not, with Bing gaining Microsoft only .04 percentage points
in search in
its first month of existence.
"Search is still an unsolved problem," Schmidt said. "Even
though Google is working very, very hard ... to make search more social, more
personal, more intelligent ... users are now coming to us with increasingly
more complex questions and queries. We're getting much better at finding the
exact information people are looking for."
He pointed to Google Squared,
the company's search spreadsheet feature,
which sorts data facts from across the Web, as one of the new search options
Google employs to organize information online.
For advertising, Schmidt reaffirmed that Google is experimenting with new
forms of local, product, mobile and video search. While Google does not break
out sales from individual ad units, he said display ads, in particular
DoubleClick and YouTube, performed well in the quarter.
In other second-quarter figures, Google's TAC
(traffic acquisition costs), or the money Google paid to its AdSense partners
to carry its online advertising, totaled $1.45 billion, compared with TAC
of $1.47 billion in the year-ago quarter.
Paid clicks, which include clicks on ads served on Google sites and those of
its AdSense partners, grew 15 percent from second-quarter 2008 but decreased 2
percent from the first quarter this year. Moreover, the average cost-per-click
decreased 13 percent over the second quarter of 2008, but increased 5 percent
over the first quarter of 2009.
Consistent with Google's head-count trimming from the first quarter, the
company reported 19,786 full-time employees, down from 20,164 full-timers in
the first quarter. Google also said it has $19.3 billion in cash.