Despite challenges from governments and rivals Apple and Facebook, Google reports revenues of $6.77 billion for the first quarter, a 23 percent increase from the year-ago period. Google's net income rose 37 percent to $1.96 billion on $6.06 a share from $1.42 billion on $4.49 in the year-ago quarter. Google Android performed well, with 34 devices available from 12 OEMs, 60,000 new mobile devices shipped per day and 38,000 apps in the Android Market. In a major change, Google CEO Eric Schmidt will no longer take part in the company's quarterly conference calls.
Google April 15 reported revenues of $6.77 billion for the first quarter, a
23 percent jump from its $5.51 billion in sales from the first quarter of 2009.
Google's net income rose 37 percent to $1.96 billion on $6.06 per share from
$1.42 billion on $4.49 per share from the year-ago quarter. Excluding
stock-based compensation, profit was $6.76 per share. Wall Street analysts had
expected Google to report earnings per share of $6.60.
Aggregate paid clicks, which includes clicks related to ads served on Google
sites and those of its AdSense partners, also beat analyst expectations,
increasing 15 percent over the first quarter of 2009. Cost-per-click on Google
and its partners' Websites increased approximately 7 percent over the first
quarter of 2009.
TAC (traffic acquisition costs), or
revenue shared with Google's partners, increased to $1.71 billion in the first
quarter of 2010, compared with TAC of $1.44
billion in the first quarter of 2009. Google's TAC
comprised 26 percent of Google's total ad sales.
Google has $26.5 billion in cash on hand and employs 20,621 people. Search
has a snapshot of Google's first-quarter results here.
Google's first-quarter performance was a rousing sign that the Internet
sector may have shaken itself free from the doldrums of the recession. It also
indicates that the company has weathered challenges to its business practices
to its business practices
by the United States
and Chinese governments, as well as by rivals such as Apple and Facebook.
Affirming the strong results, Google Chief Financial Officer Patrick
Pichette said on the call that the "digital economy continues to grow
rapidly" in 2010.
In a major change, Google CEO Eric
Schmidt will no longer take part in the company's quarterly conference calls. Pichette
characterized this change as a "streamlining" to press and analysts
on the call, saying Schmidt is simply busy and no one should read anything into
Google's change in format for the call.
Pichette said he would lead the call, reviewing quarterly earnings with help
from Jonathan Rosenberg, senior vice president and product management.
Rosenberg could not make the
call today, so Susan Wojcicki, Google's vice president of product management
for ads, and Jeff Huber, Google's senior vice president of engineering for ads,
helped Pichette discuss the results.
Wojcicki said there was lot of opportunity to improve Google's efforts in
search, display and mobile advertising, noting the videos, pictures and
products in ads. Specifically, she pointed to image ads, product ads, site link
ads and click-to-call ads as new offerings that have proven successful for
Google in the short term.
"The idea is to make the ads more useful, and therefore higher-performing,"
she said. Click-through rates for Ad
which allow search advertisers that buy their own brand names to
add additional links to a search ad, are up as much as 30 to 40 percent.
Expect to see Google push these harder in 2010.
Huber provided some mobile statistics, noting that there are now 34
smartphones based on Google's Android operating system from 12 OEMs. More than
60,000 Android devices are sold and activated each day, and Google's Android
Market sports more than 38,000 mobile applications.