Online advertising drives Google

Internet search engine Google has revealed a huge jump in its earnings after unveiling its recent results.

The US giant, which is valued at about $86bn (£49bn), saw its quarterly profit more than quadruple, propelled by a rise in online search advertising.

Google recorded a second-quarter net profit of $342.8m, compared to $79.1m in the same period a year ago.

The results come two days after US rival Yahoo unveiled a six-fold increase in profit to $754.7m.

Shares in Google have soared since the firm's market debut last year, boosted by strong revenue from advertising.

On Thursday they reached a record high at the close of the Nasdaq, of $313.94, before falling in after-the-bell trade in New York.

Media giant

Google, which was set up by Internet entrepreneurs Sergey Brin and Larry Page, is paid by advertisers every time adverts displayed next to its search results are clicked on.

Revenue, almost entirely from the above search advertising, was $1.38bn, compared with $700.2m in the same period in 2004.

However, there "was not as much upside as some had hoped", said Marianne Wolk, Internet analyst at Susquehanna Financial Group.

The California-based company's meteoric rise was sealed in June after it overtook media giant Time Warner to become the world's biggest media group by stock market value.

In April, Google reported net profits of $369.2m for the January to March quarter, exceeding Wall Street forecasts.

Despite reporting a 40% rise in quarterly revenues on Tuesday, Yahoo's results failed to match Wall Street expectations, raising some doubts about the pace of growth in Internet advertising.

China battleground

On Wednesday, software giant Microsoft said it was suing Google for hiring one of its vice presidents to set up a research centre in China.

Google has more than 20% of the Chinese search market and the country is a new battleground for the two firms, which offer online and desktop search tools.

Google's flotation on the Nasdaq in August 2004 was the technology index's third largest US-based initial public offering, or IPO, after Charter Communications in 1999 and Genuity in 2000.

The company was expected to announce its second-quarter results after the Wall Street market closing bell yesterday.

print this article

Return to internet news headlines
View Internet News Archive

Share with: