Sat, Jul 21, 2012 - Page 15 News List

Google’s quarterly profit surges 35% year-on-year

AFP, SAN FRANCISCO

A screenshot shows the Google logo on Jan. 11 last year in Washington.

Photo: AFP

Google on Thursday reported a surge in quarterly profit to US$2.79 billion on the back of rising online advertising revenue, beating Wall Street expectations.

The California-based online search titan’s profit rose 11 percent in the quarter ended June 30, as consolidated revenue climbed 35 percent to US$12.21 billion compared with the same fiscal quarter last year.

“Google standalone had a strong quarter with 21 percent year-on-year revenue growth and we launched a bunch of exciting new products ... in particular the Nexus 7 tablet, which has received rave reviews,” Google chief executive Larry Page said.

“This quarter is also special because Motorola is now part of the Google family, and we’re excited about the potential to build great devices for users,” he added.

Google in May completed the US$12.9 billion deal for Motorola Mobility, a key manufacturer of smartphones and other devices that put the Internet giant in head-to-head competition with Apple.

Google acquires 17,000 patents with the purchase of Motorola Mobility and has been strengthening its patent portfolio in the fight for dominance in the smartphone and tablet market.

“We are totally excited about this opportunity we have at Motorola,” Google chief financial officer Patrick Pichette said during an earnings conference call.

“There is palpable excitement,” he continued. “Clearly, people should expect some changes at Motorola.”

Page did not take part in the conference call as is the usual routine, with executives saying that the Google boss and co-founder was still recovering from a throat problem that left him temporarily unable to speak.

“Larry has lost his voice,” said Google chief business officer Nikesh Arora. “That means he cannot do any speaking engagements, including this earnings call, but he continues to run the company.”

Google’s dominant share of the US online-search advertising market is set to grow to 77.9 percent this year from slightly less than three-quarters last year, according to industry tracker eMarketer.

In comparison, the piece of the market held by Microsoft search-engine Bing was expected to remain unchanged at 7 percent.

Google will rake in one of every US$10 spent on advertising this year in the US as the overall market reaches US$169.5 billion, according to eMarketer.

Google is also dominating the US mobile advertising market, seen as a key source of revenue for Internet firms as modern lifestyles revolve increasingly around smartphones and tablet computers.

Spending on US mobile ads is projected to leap 80 percent this year to US$2.61 billion, with Google’s share at nearly 52 percent, according to eMarketer.

“Mobile is very important,” Arora said. “It is evident in our commitment to Android as well as our purchase of Motorola.”

Google shares rose 3 percent to US$611 in extended trading on Thursday. The stock had increased 2.1 percent to US$593.06 at Wednesday’s close in New York, and has declined 8.2 percent this year.

The shares may have received a bit of a “relief rally” as Google delivered higher revenue than some of the more pessimistic estimates, said Clayton Moran, a Delray Beach, Florida-based analyst at Benchmark Co. Moran had estimated adjusted sales of US$8.26 billion.

“The results were better than feared,” he said. “That’s the bottom line.”

Additional reporting by Bloomberg

This story has been viewed 2248 times.
TOP top