Google Q2 profits up 18% following cost-cutting

Google has reported net income of $1.48bn for the second quarter of 2009, an 18% increase compared with the same period the year before.

Google has reported net income of $1.48bn for the second quarter of 2009, an 18% increase compared with the same period the year before.

Earnings of $5.36 a share was better than the forecast of $5.08 a share, and revenue rose 3% for the period at $5.52bn.

Although a modest increase, the gain is in sharp contrast to the 3% decline in revenue in the first three months of the year compared with the last quarter of 2008.

Chief executive Eric Schmidt said: "These results highlight the enduring strength of our business model and our responsible efforts to manage expenses."

Analysts attributed the significant gains in net income despite the small revenue gain and the economic downturn to Google's internal cost reduction programme.

This has included some staff cuts and a slowing down the pace of hiring new employees.

Other cuts have been made in research, marketing and non-core projects. Google has cut datacentre costs through improving efficiency and consolidation.

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