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Google shares down as results fall short
AFP - Friday, July 16
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Google shares down as results fall short
Slideshow: Full Photo Coverage: Internet Portals & Search Engines
SAN FRANCISCO (AFP) - – Google shares fell in after-hours trading Thursday as the Internet search and advertising giant posted strong revenue growth but failed to meet Wall Street expectations.
The Mountain View, California-based company said its second-quarter net profit rose 24 percent over a year ago to 1.84 billion dollars and revenue also increased by 24 percent to 6.82 billion dollars.
Adjusted earnings per share of 6.45 dollars came in slightly below the 6.52 dollars expected by analysts, however, and Google shares shed 4.21 percent in after-hours electronic trading to 473.20 dollars.
Google chief executive Eric Schmidt said the company had a strong second quarter with "solid growth in our core business and very strong growth in our emerging businesses."
"We saw strength in every major product area, as more and more traditional brand advertisers embraced search advertising and as large advertisers increasingly ran integrated campaigns across search, display, and mobile.
"We feel confident about our future, and plan to continue to invest aggressively in our core areas of strategic focus," Schmidt said.
Google said revenue from outside the United States totaled 3.53 billion dollars, or 52 percent of total revenue, compared with 53 percent a year ago.
The company, which has been on a buying spree lately, snapping up a number of firms, said it had 30.1 billion dollars of cash and securities on hand as of June 30, up from 26.5 billion dollars a year ago.
Google said it had 21,805 full-time employees at the end of the quarter, about 1,200 more than a year ago.
In a conference call with analysts, Patrick Pichette, Google's chief financial officer, said Google was making strides in display advertising.
Display advertising includes banner ads, sponsorship and rich media ads and is distinct from the search-related advertising format dominated by Google.
"Our display network, which includes YouTube, is growing very rapidly and we see increased demand from traditional brand advertisers in that space," Pichette said.
He said Google had entered into a strategic agreement with Omnicom Media Group to partner on display advertising.
Pichette also welcomed the recent court ruling in Google's favor in the copyright case filed against YouTube, which Google purchased in 2006, by US entertainment giant Viacom.
He said Google had made "a significant investment of approximately 100 million dollars to win this case."
Pichette said the 1,200 employees added over the past year included members of AdMob, a mobile advertising firm which Google purchased for 750 million dollars, while others were in engineering, sales, search monetization, display advertising and mobile.
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