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Google tops $1.5bn in Q3

It's considerably richer than Yahoo!

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The Google money making machine stormed through Q3 2005, grossing $1.578bn in revenues and clearing a profit of $381m. That's up from $1.384bn and $342m in Q2, and $1.256bn and $369m in Q1 respectively. Earning per share was $1.32 (diluted), up from $1.19 per share in Q2.

Google's own sites provided most of the growth, accounting for 56 per cent of total revenue, 20 per cent higher than Q2. Google partner sites generated 43 per cent of revenue, a 7 per cent increase sequentially. This is where Google is most vulnerable: the cost of sales on partner properties is higher and they're vulnerable to competition. See How Microsoft can 'kill' Google (Simple - just buy its customers).

Cost of revenue - largely traffic acquisitions costs (TAC) - was $653.8m, up from $597m sequentially. As the results suggest, while revenue growth remains strong, the company continues to invest in payroll. Google added 700 staff in Q3 alone, bringing the head count to 4,989.

How does Google compare with neighbor and rival Yahoo!, which also reported this week?

Yahoo! reported a gross income of $1.329m and net income of $253m for the quarter. Yahoo!s R&D expenses at $141m, which is roughly in line with Google's $151m and it boasted lower Traffic Acquisition Costs of $597m versus Google's $653m.Yahoo!'s sales and marketing expenses were much higher at $265.7m than Google's at $104.9m.

Yahoo! has $2.94bn immediately to hand for potential acquisitions. However thanks to its recent share issue, Google now has a war chest of $7.62bn in cash and ready stock.

But Yahoo! can respond that with its more diversified business, it hasn't put all its colored balls in one basket.®

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