Google Q1 profit exceeds expectations

| April 16, 2010 | 0 Comments
Google Q1 profit exceeds expectations

US search engine giant, Google, said revenues surged 23% in the first quarter of 2010 to $6.77 billion, compared with $5.51 billion in the same period a year ago - the greatest revenue growth since the third quarter of 2008.

Net income soared 37% to $1.96 billion on $6.06 per share from $1.42 billion on $4.49 per share against the same period a year ago.

Excluding stock-based compensation, profit was $6.76 per share. Analysts had forecast the company to report earnings per share of $6.60.

Google suffered amid the economic downturn as advertisers reduced their budgets but budgets are expected to rise again this year as the global economy recovers.

Meanwhile, the company recruited almost 800 members of staff during the three-month period - the most in two years.

However, the hiring disconcerted investors since the added expense could negatively impact on earnings growth.

Many believe Google might be abandoning some of the financial discipline it demonstrated in late 2008 and last year as the recession hit.

According to Patrick Pichette, Google’s chief financial officer: “Hiring more people does not mean we are wasteful. It just means we have a great agenda.”

He added that the company will continue to hire aggressively this year and be on the lookout for acquisitions.

In related news, the 10-year search and advertising deal between Microsoft and Yahoo was approved recently by both the US Department of Justice and the European Commission.

The deal, which was agreed in July 2009, was set up to challenge Google, which currently monopolises the industry with 90% of the worldwide search market.

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