Piling on profits, Google more than doubled its quarterly profit thanks to a continued outpouring of online advertising

Piling on profits, Google more than doubled its quarterly profit thanks to a continued outpouring of online advertising that boosted revenue more than 75 percent from a year ago.

Published: 20 Jul 2006

Piling on profits, Google more than doubled its quarterly profit thanks to a continued outpouring of online advertising that boosted revenue more than 75 percent from a year ago.

During the quarter ended June 30, Google collected $2.5 billion in revenue, up 77 percent from the same period last year.

Ninety-nine percent of Google’s revenue came from online advertising. In comparison, Yahoo reported advertising revenue of $1.38 billion, up 27 percent, according to reports.

Google’s net income increased 110 percent to $721.1 million, or $2.33 a share for the three-month period ended June 30, significantly more than analysts had predicted, though the company gives little guidance on its financials. Net income for the same period last year was $343 million.

More than half of Google’s advertising -- 58 percent -- was sold on Google’s own Web pages, which include its search results and electronic mail. The rest was sold through Web pages affiliated with Google through its AdSense programme, the company reported.

“The opportunities before us really are unlimited at present,” Eric Schmidt, chief executive, Google told analysts. “It’s another good day and a good quarter at Google.”

“We are very, very happy with having such a strong quarter in a seasonally weak period for us – it look as though our model continues to work extremely well,” said Schmidt.

As per the information available, the result, in sharp contrast to a lacklustre Yahoo quarter unveiled this week, shows Google gaining market share at the expense of its rivals in the sector after continued improvements to service and heavy investment in technology.

“Google is clearly winning the battle,” Internet analyst Derek Brown of Pacific Growth Equities reportedly said. “These are almost logic-defying results.”

“This quarter should put to rest any questions about Google hitting some kind of wall” in its growth, Brown said. “They seem to be knocking all the walls down.”

“You really have to applaud this kind of performance,” Sasa Zorovic, an analyst with Oppenheimer & Co, reportedly said.

“For at least the next two quarters, we see wind at Google’s back,” Rob Sanderson, an analyst with American Technology Research, wrote in a recent note. One reason: On Tuesday, Yahoo announced that it was delaying the release of new advertising software, leaving room for Google to further entrench its lead with advertisers, reported media.

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