Google revenues up 18 per cent

Google revenues up 18 per cent

Revenue rose 18 pct -- a shadow of 50 per cent growth levels that Google used to enjoy.

Google Inc’s quarterly earnings beat Wall Street forecasts as strong advertising sales on its self-branded websites helped the Internet leader defy the gloom pervading the tech sector.

The results,which sent Google shares up 2.6 per cent in after-hours trading,were a relief for investors who had been stunned by a series of dismal reports from Microsoft Corp,Intel Corp and other tech companies.

“We have something to feel good about with this Google news in what has been shaping up to be a gloomy earnings period,” said Keith Wirtz,president of Fifth Third Asset Management.

Google said fourth-quarter net income fell to $382 million,or $1.21 a share,from $1.21 billion,or $3.79 a share,a year earlier due to impairment charges on its investments in Clearwire Corp and Time Warner Inc unit AOL.


Excluding one-time charges,profit was $5.10 a share,beating the average analyst forecast of $4.95 according to Reuters Estimates.

Revenue rose 18 per cent to $5.7 billion — a shadow of the 50 per cent growth levels that Google used to enjoy,but considered by analysts to be a robust performance given the weak economy and corporate cutbacks in advertising spending.

“It was,all things considered,very good numbers,” said Wunderlich Securities analyst Martin Pyykkonen. “In this market and relative to the numbers that are being put out — I would go so far as to say relative to the numbers that Yahoo probably will put out next week — these will look good.”


Google said it will offer employees a one-for-one stock option exchange for “underwater” options as an incentive for employees to stay with the company. The new options will have an exercise price equal to the closing price on March 2.

Google-owned sites,like and generated 67 per cent of revenue,or $3.81 billion,rising 22 per cent from a year ago. Traffic acquisition costs,the portion of revenues shared with Google’s partners,decreased to $1.48 billion.

“It’s clear that macroeconomic challenges continue to rob Google of growth,but it seems equally clear that the company continues to make headway in this market,and take share in this market,” said Cantor Fitzgerald analyst Derek Brown,who has a buy rating on Google and makes a market in its shares.

Google Chief Executive Eric Schmidt struck a cautious note,saying the last quarter had benefited from the holiday season when many users were seeking retail bargains online.

“Now clearly we’re in a worldwide recession as everybody knows,rising unemployment,foreclosures,that sort of thing,” he said on a conference call. “But we don’t know how long this period will last. We obviously hope it will be short.”

The Mountain View,California business ended the quarter with nearly $16 billion in cash,at a time when many tech and media companies are trading at all-time low valuations.