Google Announces Blockbuster Profit

Google reported more than US$1 billion in profit in the final quarter of 2006, beating the market’s high expectations for the search engine.

Google’s earnings in the quarter ending December 31, 2006, were $1.03 billion, or $3.36 per share. Analysts had forecast earnings for the quarter would tally $2.90 per share in the quarter.

Google’s fourth-quarter revenues of $3.21 billion topped those of the same period a year earlier by 67 percent.

“Our impressive performance in the fourth quarter demonstrates the continuing strength of our business model across Google properties and those of our partners,” said Google chief executive Eric Schmidt.

“Our growing organization allows us to deliver ever increasing amounts of information and content to our users both through investments in search and ads as well as through strategic partnerships.”

Google reported its earnings for 2006 were $3.077 billion, or 10.21 cents per share, which was more than double that of the prior year.

“Business continues to be very good here at Google,” Schmidt said during a conference call with analysts.

“It turns out that we are gaining share in almost every country; our international business contributed a significant financial component.”

Approximately $1.4 billion of Google revenues for the year came from markets outside of the United States. British and US markets combined accounted for 75 percent of Google’s revenues, according to executives.

“We will be growing the company,” Schmidt said. “We are taking the learning from our US and UK sales models and mobilizing them and taking them from the mature markets to the emerging markets.”

Mobile search and advertising were Google priorities for this year, company co-founder Larry Page said during the conference call.

Partnerships formed last year with companies such as MySpace, China Mobile, Samsung, and Apple were “kicking in” and Google intended to continue making allegiances and acquisitions in 2007, according to Schmidt.

Analysts pressed Google executives to detail how they would end copyright infringement concerns and make money off popular video-sharing website YouTube, which Google bought last year in a $1.65-billion stock deal.

“We believe, ultimately, we will develop partnerships in advertising,” Schmidt said. “We know people who use YouTube are very fanatical about it. There will be all sorts of ways to link users and content providers.”

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