Google on Thursday reported a five-fold jump in quarterly net profit to US$1.97 billion as the global economy gradually recovered from the fiscal crisis.
Google said fourth-quarter revenue climbed 17 percent to US$6.67 billion and that it finished the year with net profit up 54 percent to US$6.52 billion.
“Given that the global economy is still in the early days of recovery, this was an extraordinary end to the year,” Google chief executive Eric Schmidt said.
Schmidt credited Google’s management team, innovative talent and business model as building blocks for the stellar final months of last year.
“As we enter 2010, we remain hugely optimistic about the Internet and are continuing to invest heavily in technological innovation for the benefit not only of our users and customers, but also the wider Web,” Schmidt said.
In what could be good news for the economy, Google saw a 13 percent increase in “paid clicks” on ads posted at its online properties.
While Google tightly managed its budget through the economic meltdown, it feels the time is ripe to acquire promising new companies or technologies, executives said.
“The pace of deals in Q4 shows that we’re at least on a path of one per month and we should expect that to continue, some big, more small than big probably,” Schmidt said during an earnings conference call.
Google reported that it finished the year with US$24.5 billion in cash, cash equivalents and short-term marketable securities.
About 53 percent of Google’s revenue for the quarter came from outside the US, a development that could shine an even harsher spotlight on the Internet giant’s threat to pull out of China over online censorship.
Google has promised to stop bowing to Chinese online censorship that came as a legal condition when the California technology firm tailored a search engine for that country in 2006.
The impetus for the stand was China-spawned cyber espionage that recently targeted Google and other firms.
As of Thursday, Google was still censoring Web search results in China but that will change, Schmidt said.
“We’re in conversation with the Chinese government,” Schmidt said. “Our business in China is today unchanged.”
“We continue to follow their laws, we continue to offer censored results,” Schmidt said. “But in a reasonably short time from now we will be making some changes there.”
Schmidt did not provide further details. Google said last week that it would no longer censor Web search results in China even if that meant it had to leave the country.
Schmidt said Google would like to stay in China.
“We made a strong statement that we wish to remain in China,” he said. “We like the Chinese people, we like our Chinese employees.
“We like the business opportunities there, but we’d like to do that on somewhat different terms than we have,” Schmidt said.
Google chief legal officer David Drummond has gone on record with Agence France-Presse, saying that the company’s stand in China was “a question of trying to do the right thing” and not a matter of profit or publicity.
Analysts wonder what Google shutting down its search engine in China will mean to the firm’s bottom line as well as the future there of the company’s other offerings, such as mobile telephones with Android operating systems.
Google earnings for the quarter bested analyst expectations, but the company’s stock price slid more than 4 percent to US$557.95 per share in trading that followed release of the report.
Online advertising in key sectors such as finance, travel and auto have yet to recover, Citigroup analyst Mark Mahaney highlighted in a note regarding the Google earnings figures.
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