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Google Pleases Analysts and Searchers
Google's second-quarter results, published yesterday, have beaten analyst expectations, with ad revenue and market share continuing to rise. Meanwhile its share of searches in the US rose to around 50% in May, according to Nielsen//NetRatings.
Net earnings for the quarter were $772m, or $2.49 per share, excluding one-time items, and revenue was $1.68bn excluding commission payments to partners.
Including items, earnings were $721m, or $2.33 a share, for the quarter ending on 30 June, versus $342.8m, or $1.19 cents, a year earlier on the same basis. The company ended the quarter with nearly $10bn in cash. Analysts were generally very happy with Google's results, seeing both increasing maturity and continuing growth. Results from rival Yahoo!, posted earlier in the week, met a more mixed reaction.
Google CFO George Reyes said: 'Growth in both traffic and monetisation contributed to our performance this quarter', as well as continued growth in new advertiser customers. Operating expenses, which totalled $652m, were due to spending on hiring; acquiring and leasing facilities; sales and marketing; research and development; and advertising, Reyes said. The company plans 'aggressive hiring and strategic distribution deals' in the third quarter, but margins 'may decline' as investments are made, for example in building and buying property rather than leasing.
Google was the top search site with nearly half (49.1%) of all Web searches in the US in May, according to Nielsen/NetRatings. US web traffic to the Google parent company grew 25% from Q2 2005 to Q2 2006, increasing from a 3-month average monthly unique audience of 76.8m to 95.9m. Among the 5 largest online parent companies, Google was the fastest growing year over year:
[table]
Source: Nielsen//NetRatings, July 2006
*Based on 3-month average monthly unique audience
If these growth rates continue, Google will be the top parent in just over a year.
NetRatings says the total number of US searches conducted at Google has grown 34% year on year, from 2.1 billion in May 2005 to 2.8 billion in May 2006. Google was also the No. 1 search provider in May 2006 within the following verticals: Web Search, Local Search, Image Search and News Search (Source: Nielsen//NetRatings MegaView Search, July 2006). The agency is online at www.netratings.com .
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