Saturday, July 21, 2012

Google Profit Rises, Tops Estimate

Internet giant Google Inc. (GOOG: News ), said Thursday its second quarter profit increased from last year as strong growth at its search advertising business spruced up revenues. Google's quarterly earnings easily topped Street estimates, while revenues were short of expectations. Google shares are currently up 3.2 percent in after-hours trade on the Nasdaq.
CEO Larry Page said, "Google standalone had a strong quarter with 21% year-on-year revenue growth, and we launched a bunch of exciting new products at I/O - in particular the Nexus 7 tablet, which has received rave reviews."
Google's revenues for the quarter were up 35 percent, year-over-year. This includes contribution from Motorola Mobility which Google acquired in May, but the business ran an operating loss.
Google's mainstay advertising revenues for the quarter were up 21 percent from last year.
Aggregate paid clicks, which include clicks related to ads served on Google sites as well as sites of its AdSense partners, grew 42 percent year-over-year.
Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of AdSense partners, decreased about 16 percent from last year.
According to a recent data by comScore Inc. (SCOR), Google Sites led the U.S. explicit core search market in June with 66.8 percent of search queries conducted, followed by Microsoft Corp. (MSFT) with 15.6 percent and Yahoo! Inc. (YHOO) with 13.0 percent.

Google, which continues to dominate the Internet search market, has been venturing into areas outside its traditional search business. The company in June unveiled its small tablet "Nexus 7" in a bid to grab a share of a humongous market dominated by Apple Inc.'s (AAPL) iPad, as well as Inc.'s (AMZN) Kindle Fire.
Microsoft recently jumped into the fray, unveiling its "Surface" tablet that will run on a new operating system.
Google's Nexus 7 tablet will run on Jellybean, its newest version of Android operating system. The device costs $199, much cheaper than the $499 an iPad costs.
While Google's Android mobile operating system has grabbed a discernible share of the smartphone market, tablets based on its software are yet to unsettle iPad's dominant position that has a near two-third market share. Google's acquisition of Motorola Mobility, a maker of Android smartphones and tablets, is expected to help it create better Android devices.
Mountain View, California-based Google reported second quarter net income of $2.79 billion or $8.42 per share, compared to $2.51 billion or $7.68 per share last year.

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