Google profits continue to soar

Google profits continue to soar

The ascent of Google continued last night when the search engine reported fourth-quarter profits of $204m (£109m). The figure is more than a sevenfold increase on the $27.3m earned in the same period a year ago.

It benefited from the widespread robust return of online advertising. Revenues in the period almost doubled to a little over $1bn, up from $512m a year earlier.

Google's share price went crashing through the $200 mark in after-hours trading, rising 9% to $208.95. The company debuted on Wall Street last August at $85 a share.

Ironically, Microsoft officially introduced its rival internet search engine yesterday after a soft launch in November. It is planning an advertising blitz in the hope of grabbing market share. It hopes to persuade its 350m users, many of them on its popular Hotmail and Messenger services, to also use the search engine.

Microsoft and Yahoo are both aggressively chasing Google's lead. Anthony Noto, an analyst at Goldman Sachs, expects the worldwide market for search-related advertising to grow 45% this year to $8.4bn.

Google has introduced a series of new search functions aimed at staying ahead of the pack, allowing users to search books and other documents. Last week it added a feature allowing people to search video and television clips and transcripts. It has also announced plans to launch its own email service, a direct threat to Microsoft's MSN and Yahoo.

In the full year, Google earned $399m, up from $105.6m in 2003. Revenues in 2004 were $3.2bn against $1.5bn. Fourth-quarter figures would have been higher but for a $60m charge related to stock options. Google has 35% of the US search market, according to industry figures.

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