Google on Thursday trumped expectations and reported a net profit of US$382 million for the final three months of last year despite US$1 billion vanishing in sinking investments.
Fourth-quarter earnings per share of US$1.21 fell far short of the US$3.79 per share posted during the same quarter in 2007, but they were hamstrung by one-time charges related to Clearwire and America On Line (AOL).
Google reported revenue for the recently-ended quarter of US$5.7 billion, an 18 percent rise from the same period a year earlier.
“Google performed well in the fourth quarter, despite an increasingly difficult economic environment,” Google chief executive Eric Schmidt said. “It’s unclear how long the global downturn will last, but our focus remains on the long term, and we’ll continue to invest in Google’s core search and ads business as well as in strategic growth areas such as display, mobile and enterprise.”
Google said revenue rose in almost every online search category.
Google’s stock price gained more than 2 percent to US$313.21 per share in after-hours trading that followed the release of the Mountain View, California, firm’s earnings figures.
“We saw strong search query growth year-on-year; revenue up, and tight control on costs — something that has eluded us in the past but we think we have the formula down now,” Schmidt said during an earnings conference call.
Google has curtailed hiring, and even recently eliminated 100 recruiting jobs.
Google’s sales force went out and told customers that targeted online advertising was key to making money, especially in dismal economic times, Schmidt said.
“It is absolutely true the people are shifting to the Web and advertising is going online; and that is good for Google,” Schmidt said. “We are optimistic about Google and its future.”
Google sees “huge” untapped potential in online search and advertising arenas and is investing in improving query results and the relevance of associated ads, executives said.
“Wouldn’t it be nice if Google understood the meaning of your search phrase instead of just the words,” Schmidt said.
“We have things we are going to be rolling out,” he said.
Schmidt confirmed reports that Google was readying a way for owners of films, television shows and other “commercial video” that pops up on YouTube to add advertising, even if users of the Web site post content without permission.
“There are deals on their way,” Schmidt replied when asked about barriers to making advertising money from video posted at Google-owned YouTube. “It is fair to say we haven’t found a single solution that drives revenue wildly and we are working on that.”