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Google quarterly profit climbs to 1.21 billion dollars

Source:AFP.com Author:Glenn Chapman Date:03/25/14 Click:

SAN FRANCISCO (AFP) - Google reported Thursday that its profits for the last three months of 2007 climbed to 1.21 billion dollars, but its stock price sank as the figure fell short of Wall Street expectations.

Google said its gross revenues for the quarter ending December 31 were 4.83 billion dollars, a 51 percent increase from the same period in 2006.

After accounting for money Google pays other websites for Internet traffic, its revenues for the recently ended period were 3.39 billion dollars.

Profits for the final quarter of 2007 were 3.79 dollars per share as compared to 3.38 dollars in the same period the previous year.

"We're very pleased with our performance this quarter," said Google chief executive Eric Schmidt.

"It reflects strong momentum in our core business, growing receptivity to our new business initiatives, and improved discipline in managing our operating expenses."

Google stock price dipped nearly 40 dollars to 525.90 dollars in trading that followed the release of the report, which disappointed financial analysts that had expected the Internet giant to make more money.

"Google is one of those stocks that trades on amazing earnings and this fell short of amazing by a significant margin," Silicon Valley analyst Rob Enderle told AFP. "The stock took a beating as a result."

Investors seem to be keying on indications that Google's competition is getting tougher and its operating costs are creeping up, according to Enderle.

The portion of revenues that Google shares with partners that send Internet traffic its way was 1.44 billion dollars in the last three months of 2007, as compared with 1.22 billion dollars in the previous quarter.

Google hired nearly 1,000 workers in the last three months of 2007, bringing its count of full-time employees to 16,805. The Mountain View, California, firm ended the year with 14.2 billion dollars in its coffers.

Google reported total 2007 profits of 4.2 billion dollars as compared with 3.08 billion in 2006.

"We had strong financial performance across the board," Schmidt said during a conference call with analysts and reporters.

More than half of Internet search traffic handled by Google in 2007 came from outside the United States. Google reported particularly strong growth in France, Germany, Ireland, Spain, Brazil, and China.

"The international market is still very nascent with tremendous potential for what we can do over time," Schmidt said.

Google is experimenting with ways to generate advertising revenue from its increasingly popular video-sharing website YouTube as well as on social networking websites such as MySpace and Google-owned Orkut.

"I don't think we have the killer, best way to advertise on social networks yet," Google co-founder Serge Brin said during the call.

"It's a big opportunity. Even though the fourth quarter was disappointing in terms of monetization, we are optimistic about the future."

Eventually there will be "significant amounts" of advertising on YouTube, according to Google co-founder Larry Page.

Google is investing in tailoring advertising and Internet services to mobile devices, a market growing faster than the rest of the industry.

"The iPhone is the first of a whole generation of products that will be much more mobile search intensive, and with that search comes opportunities for ad monetization," Schmidt said.

"Ten or 20 years out, it is reasonable to assume the majority of searches will be on mobile or personal devices."

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