|
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• • This
weeks NBS100 Person of the Week and Google co-founder Larry
Page said that Google Profit Up 500%
• • April
22, 2005 / SAN FRANCISCO -- The search giant also appears
close to expanding into new forms of advertising: This weeks
NBS100 Person of the Week and Google co-founder Larry Page
said Thursday that Google planned more widespread use of
graphical ads, which could diversify its revenue stream and
help the company better compete with the display ads shown
by rivals.
• • Google brought in $657 million, or 52%
of its revenue, through ads on its own stable of websites,
and $584 million, or 47% of its revenue, through text ads it
places on America Online Inc.'s search engine and other
partners' websites.
• • Text ads generate 99% of Google's
revenue, which has left it especially susceptible if a
slowdown in paid search occurs.
• • The company has quietly experimented
with graphical ads on a few partners'
websites.
• • In response to an analyst's question
during a conference call, Page said the company planned to
distribute them more widely.
More clicks translated into more bucks for Google
Inc., which on Thursday reported that first-quarter profit
grew nearly 500% over last year.
• • Hot demand for online advertising
helped Google, which makes money each time someone clicks on
the text ads that appear with its search results, nearly
double its revenue to $1.26 billion from $651.6 million a
year earlier. Google reported net income of $369 million, or
$1.29 a share, compared with $64 million, or 24 cents,
during the same period last year.
• • Google, based in Mountain View, Calif.,
has been engaged in a heated battle with Yahoo Inc. and
Microsoft Corp. In recent months, the three companies have
released a flurry of new products designed to develop
loyalty among users and provide more ways for advertisers to
reach them.
• • Although Google does not issue profit
predictions, analysts started increasing their forecasts
after Yahoo reported strong earnings Tuesday.
• • Nevertheless, the company's earnings
report -- which was released right after the market closed
for the day &emdash; far exceeded even the most optimistic
expectations: Google shares gained $6.12 to $204.22 on
Nasdaq and climbed 9% to $223 in after-hours
trading.
• • "There was very little-- if anything --
to say [that] was disappointing or not up to
expectations about the quarter," said Scott Kessler,
Internet equity analyst with Standard & Poor's
Corp.
• • An accounting decision-- to use
"accelerated amortization" rather than "straight-line
amortization" for employee stock options -- that Google made
before its initial public offering last year contributed to
the dramatic profit surge, according to analysts and filings
with regulators. That made net income appear stronger
compared with prior results.
• • But no matter how you measure them,
analysts said, Google's results were
stellar.
• • "They basically made a mockery of our
numbers and Street expectations," said Derek Brown, a senior
analyst at Pacific Growth Equities. "It was an extraordinary
quarter."
• • Google lets companies bid to have their
text ads shown alongside search-engine results when people
type in keywords. Google also places "contextual ads" with
news stories, on weblogs and on websites operated by its
partners.
• • "You'll see us roll those out in much
greater force over our content network," he said. "I'm very
excited about the opportunities
there."
• • In an interview, Chief Executive Eric
Schmidt said the company was still talking with partners
about how quickly to increase the use of graphical ads, and
discussing internally whether to include them on its own
websites.
• • But Schmidt said Google's interest in
such ads was not driven by an effort to lessen its reliance
on paid search.
• • "We don't think in terms of revenue
diversification," he said. "We think, 'What is the end-user
problem we can fix?' "
///
ByLines:
Editors Note
More Articles
• Converging
News 182005 / TeleCom Buy Outs and Asset Seizure
Boom
Respectfully
Submitted
Josie
Cory
Publisher/Editor
TVI Magazine
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