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January 31, 2007

Google delivers fourth-quarter revenues that increased over 67 percent and net profits that nearly tripled on strong demand for its cash cow paid search business.

Overall, Google's net earnings for the quarter ended Dec. 31 were $1.03 billion, or $3.29 a share, including one-time items such as stock-based compensation, compared with $372 million, or $1.22 a share, during the same quarter the year before.

Excluding those items, earnings were $997 million, or $3.18 a share.

Total revenue for the quarter rose 67 percent to $3.2 billion, compared to $1.92 billion in 2005. Excluding TAC (traffic acquisition costs), or commission paid to content partners, revenue was $2.23 billion.

Analysts polled by Thomson Financial were expecting Google to post earnings per share of $2.92 excluding items, and revenue of $2.19 billion, excluding TACs.

Paid search represents nearly all of Google's revenue.

The company is expanding its advertising platform beyond the Web into radio and print.

While things look rosy for Google, its largest search rival posted more modest fourth quarter results.

Last week, Yahoo's earnings were down more than 60 percent from a year ago.

Overall, Internet traffic to Google grew 24 percent in the fourth quarter from the same period in 2005, and Google accounts for more than fifty percent of all Web searches, according to Nielsen/NetRatings. Google is expected to capture more than 66 percent of the search advertising revenue in 2007, according to eMarketer.

Google shares closed at $501.50 in normal trading today.

The stock has risen nearly 18 percent in 2006, about the same amount that Yahoo's shares have fallen.

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Source: C-Net News