Google profits despite difficult ads market

17 Jul 2009

Search giant Google’s reported revenues were up 3pc to US$5.5bn for the second quarter, despite trading in one of the most challenging economic environments in several decades.

The company, which is increasingly becoming a competitor against Microsoft in the software space and has even revealed plans to create its own operating system Chrome OS, reported a net profit of US$1.48bn, up from US$1.25bn during Q2 last year.

Traffic acquisition costs totalled US$1.45bn, or 27pc of total revenue.

Google-owned sites generated revenues of US$3.65bn, or 66pc of total revenues.

The company’s partner sites through its AdSense programme generated revenues of US$1.6bn, up 2pc on last year.

Revenues from outside the US totalled US$2.9bn, representing 53pc of total revenues.

“Google had a very good quarter, especially given the continued macro-economic downturn,” said Google CEO, Eric Schmidt.

“While most of the world’s largest economies shrank, Google’s year-over-year revenues were up 3pc. These results highlight the enduring strength of our business model and our responsible efforts to manage expenses in a way that puts us in a good position for the economic upturn, when it occurs.

“We remain focused on investing in technical innovation to drive growth in our core and new businesses,” Schmidt added.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years