Google's strong
third quarter profit of $1.35bn comes as no real surprise, says
Justin Speake, chief executive at
Bloor Research.
"Earnings for the next two quarters will be much more
interesting because these will provide a much clearer indication if
Google has indeed managed to rise above the most recent financial
market turmoil," he said.
The Google results represent an increase of 31% compared with
the same period last year and an increase of 3% compared with the
second quarter of 2008.
Although shares have dropped 49% in the past year, Google's
latest profit figures support the firm's optimistic financial
outlook based on confidence in
online ad revenues.
"Advertisers are definitely moving away from TV and print to
online because there is a much more measurable return on
investment, but overall budgets are not yet seeing dramatic cuts,"
he said.
This may change, said Speake, as businesses begin to feel the
effects of the latest financial uncertainty and so it remains to be
seen whether
online advertising will continue to buck the downward
trend.
Google's financial results immediately lifted investor
confidence with share prices rising by over $44 to $397 in extended
trading after closing on the Nasdaq at $353.
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.