Google Q1 Profit Surpasses Analyst Expectations
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 Engine Land 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 Sitelinks, 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.