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Google profit up but revenue drops for first time
AFP - Friday, April 17
NEW YORK(AFP) - - Google reported a 9.2 percent rise in quarterly net profit, but the Internet search giant said revenue declined for the first time ever in consecutive quarters.
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The Mountain View, California-based company reported a net profit for the first quarter of the year of 1.42 billion dollars compared with 1.31 billion dollars in the corresponding quarter last year.
Revenue was 5.51 billion dollars for the first quarter, up six percent from the same quarter a year ago but down three percent compared with the fourth quarter of last year, Google said in a statement.
Google, which makes 98 percent of its revenue from Web search advertising, reported earnings per share of 5.16 dollars, considerably better than the 4.93 dollars expected by Wall Street analysts.
The decline in revenue was the first ever for Google from one quarter to the next, but it did not appear to damage the confidence of investors.
Google shares were up 4.31 percent to 405.50 dollars in electronic after-hours trading in New York after gaining 2.43 percent during the day.
"Google had a good quarter given the depth of the recession -- while revenues were down quarter over quarter, they grew six percent year over year thanks to continued strong query growth," chief executive Eric Schmidt said.
"These results underline both the resilience of our business model and the ongoing potential of the Web as users and advertisers shift online," he said.
"Going forward, our priority remains investing for the long term to drive future growth in our core and emerging businesses," Schmidt said.
Speaking to analysts in a conference call following the release of the quarterly earnings figures, Schmidt said the economy was "basically still in unchartered territory."
"The economic environment remains tough," he said.
New chief financial officer Patrick Pichette said Google, which recently announced it was laying off 200 sales and marketing employees, was "still hiring but only in the critical areas."
Schmidt declined to comment on reports that Google had reached agreement with major Hollywood studios to show full-length films and television shows on YouTube, which Google purchased for 1.65 billion dollars in 2006.
Several leading technology blogs said Thursday that Google-owned YouTube had reached agreement with Sony Pictures and several other Hollywood studios to show full-length movies and television shows on the video-sharing website.
Google-owned sites brought in revenue of 3.70 billion dollars in the first quarter, up nine percent over a year ago but down three percent from the fourth quarter of 2008, the company said.
Partner sites generated revenue of 1.64 billion dollars, down three percent from both the first and fourth quarters of 2008.
Google, which controls 63.7 percent of the US search market according to the latest figures from comScore, said that revenue from outside the United States totaled 2.88 billion dollars in the first quarter, 52 percent of total revenue.
Google also said that "paid clicks" -- clicks by Internet users related to ads served on Google sites and the sites of its AdSense partners -- increased 17 percent in the first quarter over the same quarter of last year.
Google also announced on Thursday that Omid Kordestani, who has been responsible for global sales and partnership operations, had been named a "senior advisor" to Schmidt and Google founders Larry Page and Sergey Brin.
He was replaced by Nikesh Arora, currently president of international operations, and will take on the title of president, global sales operations and business development.
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A visitor walks past the logo of Internet search engine giant Google at a trade fair. Internet search giant Google reported a 9.2 percent rise in quarterly net profit on Thursday but said revenue declined for the first time ever in consecutive quarters.
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