Google has reported that its net income rose 26%, higher than expected
Google defied the global
economic slowdown last night by posting a 26% rise in net profits for the last
quarter.
The internet search engine company also claimed to
be making strides in its battle with Facebook, announcing that more than 40
million users have joined Google+, its social network.
Google beat Wall Street expectations by reporting net income
of $2.73bn (£1.73bn) for the three months to 30 September, from $2.17bn a year
ago. Net revenue, excluding payments to partner websites, surged by 37% to
$7.51bn.
Shares in the company jumped by 6% in after-hours trading,
with Needham analyst Kerry Rice calling the results "nothing short of
phenomenal".
Google continued to expand,
hiring 2,585 employees in the quarter. That takes its total headcount to
31,353.
Analysts had feared Google's results would be marred by a
sharp rise in costs, as it strives to maintain its strong position in search
and develop new services. Instead, expenses came in below forecast.
Larry Page, Google's chief executive, declared that "we
had a great quarter", and highlighted the progress made with Google+.
"People are flocking into Google+ at an incredible rate
and we are just getting started," Page said.
The company only opened Google+ to the general
public at the end of September. Three months ago, 10 million users were using
it while it was still being trialled. It
still has some way to go to catch Facebook's 800 million users.
Google said that the number of "paid clicks" – when
users click on adverts served by Google – rose by 28%. The "cost per
click" was 5% higher than a year ago
Colin Gillis, analyst at
BGC Partners, said the figures showed that the digital economy was still
strong: "Google is capturing all the economics from this and we are moving
into the sweet spot when investors want to own Google," he added. Its shares
had fallen by 13% since February, before its latest results were released.
Mike Hickey, analyst at
National Alliance Capital Markets, said that "Overall, the tone of the
release was positive and we're not seeing any indication of weakness in
advertising in the next quarter."
Courtesy-Guardian.co.uk
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