Google Q1 profits better than expected

17 Apr 2009

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Despite the recession, Google generated record profits of US$1.42bn, trumping expectations. The company said revenues of US$5.51bn were down quarter-on-quarter, but were up 6pc compared with the same quarter last year.

Google-owned sites generated revenues of US$3.70bn, or 67pc of total revenues, in the first quarter of 2009. This represents a 9pc increase over first-quarter 2008 revenues of US $3.40 billion and a 3pc decrease from fourth quarter 2008 revenues of US$3.81bn.

Google’s partner sites generated revenues, through AdSense programmes, of US$1.64bn, or 30pc of total revenues, in the first quarter of 2009. This represents a 3pc decrease from first-quarter 2008 network revenues of US$1.69bn and a 3pc decrease from fourth-quarter 2008 network revenues of US$1.69bn.

Revenues from outside the totalled US$2.88bn, representing 52pc of total revenues in the first quarter of 2009, compared to 51pc in the first quarter of 2008 and 50pc in the fourth quarter of 2008.

Revenues from the UK totalled US$733m, representing 13pc of revenue in the first quarter of 2009, compared to 15pc in the first quarter of 2008.

Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of the company’s AdSense partners, increased approximately 17pc over the first quarter of 2008.

In terms of Traffic Acquisition Costs (TAC), the portion of revenues shared with Google’s partners, decreased to US$1.44bn in the first quarter of 2009. This compares to TAC of US$1.48bn in the fourth quarter of 2008. TAC as a percentage of advertising revenues was 27pc in the first quarter of 2009.

“Google had a good quarter given the depth of the recession – while revenues were down quarter-over-quarter, they grew 6pc year over year, thanks to continued strong query growth,” explained Eric Schmidt, CEO of Google.

“These results underline both the resilience of our business model and the ongoing potential of the web as users and advertisers shift online.

“Going forward, our priority remains investing for the long term to drive future growth in our core and emerging businesses,” Schmidt added.

By John Kennedy

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com