Google's profits more than doubled in the second quarter, as the company continued to increase its share of the lucrative search advertising market.
The company, which announced its results on Thursday, exceeded analysts' expectations for both sales and profit. That is in contrast to Yahoo, which disappointed Wall Street on Tuesday with lower-than-expected revenue from search-related advertising. Yahoo met profit expectations because it postponed some hiring and advertising spending.
Google, based in Mountain View, California, attributed its success to several areas in which Yahoo fell short. The company said it continued to develop technology that increases the advertising revenue it earns from each search, while Yahoo said its already delayed effort to build such technology would be another three months late.
Google also continued to expand the number of sites that display advertising it sells, while Yahoo is still absorbing the loss of its largest advertising client, MSN from Microsoft, which is selling its own advertising.
"We did really, really well in a quarter that is seasonally slow," said Eric Schmidt, Google's chief executive, in an interview. "Big companies as they get larger seem to slow down. We continue to innovate."
Google earned US$721.1 million, or US$2.33 a share in the quarter, compared with US$342.8 million, or US$1.19 a share, in the period a year ago. Google's revenue was US$2.46 billion, up 77 percent.
On a conference call with investors, Schmidt said that one top company priority was to expand its advertising business. One aspect of this is to build services for graphical and video advertisements of interest to brand marketers, the strongest area of Yahoo's business.
It also wants to expand its advertising auction system into other media; in that system, advertisers bid to have ads displayed on Web pages. Within three months, Schmidt said, Google will integrate the radio advertising system from its acquisition of DMark Broadcasting into its main service. He did not say what this integration would entail.
The company hopes to start selling advertisements on mobile phones, a service it offers in Japan.
Google continued its breakneck expansion, adding 1,152 employees in the second quarter, leaving it with 7,942 employees on June 30.
Sergey Brin, Google's president for technology, said the rate of hiring had slowed. The employee base grew 20 percent in the first quarter but only 17 percent in the second quarter.
"That gives us more time for people to get up to speed," he said.
The company said its business was especially strong in Europe, but that it lagged in most of Asia.
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