Google Human?

Google yesterday reported a 58% year-on-year increase in Q2 revenue, but a decline in profits saw its share price fall more than 6.5% in the day. Recent comScore figures for search engine share show a rare dimple in the market leader's long-term growth, with Microsoft the main beneficiary.

Profit was $1.2 billion, or $3.56 a share, below the $3.59 a share that analysts were anticipating. Eric Schmidt, Google's CEO explained that a larger-than-expected recruitment drive and a change in the way the company accounts for bonuses had contributed to the higher expenses and lower than predicted profits. Shares fell $34.30 to $514.29 at the start of today's trading.

'We overspent against our own plan, in the area of headcount,' Schmidt said. Google added 1,540 employees during the quarter, mainly in sales, marketing, and engineering, and had a total headcount of 13,786 by the end of the quarter.

Revenues excluding commissions paid to advertising partners were $2.72 billion, up 63% from a year earlier and slightly above Wall Street's expectations of $2.68 billion. Net income rose 28% to $925 million.

Google is growing about seven times faster than Yahoo! and twice as fast as eBay. Yet the company's overall rate of growth has been steadily decreasing in the last four years - second quarter year-over-year revenue growth was 125% in 2004, 98% in 2005, 77% in 2006 and 58% to $3.87 billion in the most recent quarter.

Last month comScore's qSearch analysis of activity across search engines highlighted that Google Sites had maintained its top spot with a slightly diminshed 49.5% of the US search market (May: 50.7%). Yahoo! Sites came in second place with 25.1% (May: 26.4%), followed by Microsoft Sites with an improved 13.2% (May: 10.3%) - Microsoft has been promoting and incentivising users via its Live Search Club, launched in late May.

In 2006 Google won 24.3% of $16.9 billion spent that year. However, according to Nielsen//NetRatings, Microsoft's US search share gained 77.4% between June 2006 and June 2007, and Google gained only 46.3% during this period. Despite this, market research firm eMarketer predicts that Google will take 27.4% of the projected $21.7 billion US online advertising spending in 2007.

In May, the firm cut the length of time it keeps users' personal search data from '18-24 months' to a maximum of 18 months (www.mrweb.com/drno/news6902.htm), following expressions of concern from European Union data protection officials.

Web sites are www.google.com , www.comscore.com , www.nielsen-netratings.com and www.emarketer.com.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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