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April 20, 2007

Late yesterday, Google stated that its net earnings jumped almost 70 percent in its first quarter, on solid sales growth.

This enables the Number One search company to effectively maintain its leading position in the rapidly growing online advertising market.

For its first quarter, Google reported revenue of $3.66 billion, an increase of 63 percent from the corresponding 2006 period. After paying for its TAC (traffic acquisition costs), Google reported overall revenue of $2.53 billion, more than Wall Street's consensus estimate of $2.49 billion, and up a little more than 66 percent from $1.53 billion in 2006.

The company's net income increased 69 percent from the same period last year to $1 billion, or $3.18 a share.

Excluding stock-based compensation as well as a tax benefit and other items, Google reported net earnings of $3.68 a share, more than the $3.30 a share that most Wall Street analysts were expecting on this basis.

The company's 1st quarter results came two days after top rival Yahoo posted disappointing first-quarter earnings and issued weaker-than-forecast sales guidance for the second quarter. Those negative news caused Yahoo's stock to plunge 12 percent Wednesday, and another 3 percent Thursday.

On Monday, research from comScore showed that Google widened its market share lead in search over Yahoo and smaller competitors such as MSN and Ask.com.

In addition to strenghtening its leading position in search, analysts have speculated that Google may also become a more significant player in other areas of advertising as well. The company acquired popular online video site YouTube in 2006.

Additionally, on Monday, Google agreed to acquire DoubleClick, a firm that specializes in placing online banner ads. Google also announced new ad-selling partnerships with radio station owner Clear Channel Communications and EchoStar, which operates the DISH satellite TV network.

Google CEO Eric Schmidt said in a statement "the global reach of our core search and ads business, combined with our focus on building our partnerships drove our strong results in the quarter.

We continued to expand our worldwide footprint, adding important new partners and growing our platform to increase our ability to deliver targeted and measurable ads."

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Source: Google Inc.