Google profits rise but not what analysts hoped for

Web search giant Google saw its profits jump 28% to $925m (£451m) over the past three months, but the figure was not as good as analysts had hoped for. Compared to the same period in 2006, when Google made a $721.1m profit, the second-quarter performance was strong. But the latest figure represented a fall from the first three months of the year, when Google made $1bn in profit. Nevertheless, Google said it was pleased with what it said was "solid growth" - particularly outside the US. 'Core strength' Sales from outside its home market now account for 48% of its total business. Overall sales were up 58% to $3.87bn compared to the same period last year, representing a 6% increase on the first quarter of the year. "Our performance once again demonstrates the strength of our core search and ads business," said chief executive Eric Schmidt. "The growth in our global traffic combined with our ongoing improvements in monetization resulted in solid revenue growth, even in a seasonally slow quarter." Google shares fell marginally before the results were announced and again, more sharply, in after-hours trading on concerns about rising costs. "The guys have been spending like drunken sailors," said Jeffrey Lindsay, an analyst at stockbrokers Sanford C Bernstein. "Operating expenses were much higher than everyone was expecting."

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