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Google share price dips after profits in strong Q2 disappoint investors

Google has reported revenue of $6.28bn (£4.06bn) and net income of $1.84bn for the second quarter ending 30 June, both figures 24% up on the same period in 2009.

Google's second-quarter profit was $6.45 a share, excluding the cost and tax benefits of stock options.

Although revenue beat analysts' expectations, the profits were below expectations, and despite the overall good performance, Google share prices fell about 4% in after-hours trading.

Profit margins were hit by Google's by increase hiring, weakening of the Euro and acquisition costs. The company is also facing legal and lobbying costs as it faces increased pressure from regulators.

Google continues to dominate in its core business of search advertising, which accounts for more than 90% of its revenue.

The company said paid clicks on Google sites and other sites that run Google ads grew 15% compared with the same period in 2009, but fell 3% compared with the first quarter.

As Google grows and search becomes increasingly competitive, analysts and investors are beginning to wonder what is next for the company, according to New York Times.

The fact that Google's share price has slipped 17% in the past three months in an indication that investors are becoming impatient, the paper said.

Google is, however, looking for new sources of revenue including display ads and mobile phones, with its Android mobile operating system and recent acquisition of mobile advertising company AdMob.

This week the company announced a new App Inventortool for building Android applications that is aimed at accelerating Android app development by making it extremely easy.


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