Google posts buoyant third quarter results

Google has reported third quarter earnings of $1.35bn, proving company predictions that online ad revenues would help buck the economic downturn.

This represents an increase of 31% compared with the same period last year and an increase of 3% compared with the second quarter of 2008.

The results immediately lifted investor confidence, with share prices rising by over $44 to $397 in extended trading after closing on the Nasdaq at $353.

Although shares have dropped 49% in the past year, Google's latest profit figures support the firm's optimistic financial outlook based on buoyant online ad revenues.

Google believes online advertising will be immune from the budget cuts for TV and print because ads alongside search results offer a measurable return on investment.

Eric Schmidt, chief executive officer at Google, said, "We had a good third quarter with strong traffic and revenue growth across all of our major geographies, thanks to the underlying strength of our core search and ads business."

Google said advertising revenue, including clicks related to ads served on Google sites and the sites of its AdSense partners, increased approximately 18% over the third quarter of 2007 and increased approximately 4% over the second quarter of 2008.