Despite upbeat statements from Google chief executive Eric Schmidt and its co-founder Sergey Brin claiming otherwise, the search giant’s fourth quarter results seemed to suggest that the recent downturn in the US economy has affected its earnings and stock prices.
While earnings for the quarter ended 31 December 2007 were at US$1.21bn – up 17pc on the same quarter last year – Google’s quarterly profit growth was under 25pc for the first time in over three years since the company went public.
At the conference call announcing the quarterly results, Schmidt said that Google had not seen negative repercussions in earnings due to the rumoured recession in the US.
“We’re very pleased with our performance this quarter. It reflects strong momentum in our core business, growing receptivity to our new business initiatives and improved discipline in managing our operating expenses,” said Schmidt.
Revenue for Google generated outside of the US came to US$2.32bn, a massive 48pc of its total revenues for the quarter, up 4pc on the same quarter in 2006. Of this, US$692m came from the UK alone.
Despite a decline in its stock in the month of January, the company has recently increased its full-time staff from to 15,916 to 16,805.
Growth of Google’s pay-per-click advertising on both Google sites and AdSense partner sites was in decline: while paid clicks had grown by 30pc in the fourth quarter of 2006, growth for the same period in 2007 was only at 9pc.
By Marie Boran