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Apr. 17, 2008

Web search giant Google reported first-quarter earnings that squarly beat Wall Street's even most conservative estimates. Google's stronger profit was mainly driven by strong global sales and across many channels.

Some analysts had expected a much weaker outlook from Google due to fears that the slowing economy was weighing on its sales and that the company wouldn't meet its numbers.

Google's stock soared in after-hours trading to about $530 a share, up from the $449.54 it closed during normal-day trading today. Volume was also very heavy.

Overall, Google's net income rose 30 percent to over $1.309 billion, or $4.12 per share.

Sales rose 42 percent to $5.2 billion. Excluding advertising sales that Google shares with partners (also known as traffic acquisition costs or TAC), the company reported revenue of $3.7 billion, which beat analysts' forecast of $3.6 billion.

A little over 53.2 percent of Google's sales came from outside the United States.

Excluding a one-time charge, Google said it earned a little under $1.543 billion, or $4.84 per share, higher than estimates of analysts polled by Thomson Financial, who typically exclude one-time items from their estimates, of $4.52 cents per share.

Google's stock jumped about 10.8 percent in after-hours trading on the news. The online giant has struggled lately, with investors worrying that Google's explosive growth is slowing down fast and that online advertising may not be immune from an economic downturn as many said it would be.

Google's quarterly results come at a time of uncertainty in the online advertising world.

Microsoft has made an unsolicited takeover bid for Yahoo in February, which Yahoo has since rejected not only once, but twice.

That has prompted rumors of a possible merger between Yahoo and AOL, as well as a joint-takeover bid of Yahoo by Microsoft and News Corp., which owns the social networking site MySpace.

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    This article was featured on Business 5.0.

Source: Tech Blog.