Google profits fall slightly

20 Apr 2007

Search giant Google has reported profits of US$1.0bn for the first quarter of this year, down from US$1.03bn in the fourth quarter of 2006. This was despite a 14pc increase in revenues to US$3.6bn over the fourth quarter of last year.

The company last year acquired for US$1.65bn and in recent weeks announced intentions to acquire DoubleClick for US$3.1bn.

The company said that Google-owned sites generated revenues of US$2.2bn, or 62pc of total revenues. This represented a 72pc increase year-on-year and a 15pc increase on the fourth quarter last year.

Partner sites of the company through its AdSense programmes generated US$1.35bn, or 37pc of total revenues, up 12pc on the last quarter.

International revenues from outside the US totalled US$1.71bn, accounting for 47pc the company’s revenue streams.

Traffic acquisition costs (TAC), the portion of revenue that Google shares with partners, increased to US$1.13bn, up from US$976m in the fourth quarter. TAC as a percentage of revenue was 31pc in the first quarter of 2007.

“The global growth of our core search and ads business and our focus on building our partnerships drove our strong results in the quarter,” said Eric Schmidt, CEO of Google.

“We continued to expand our worldwide footprint, adding important new partners and growing our platform to increase our ability to deliver targeted and measurable ads. The ongoing expansion of our network allows us to improve the user experience through new opportunities and programs,” Schmidt added.

By John Kennedy