Rivers of gold flow through Google's Q3

Fattens up on ads bonanza

By Drew Cullen in San Francisco • Get more from this author

Posted in Financial News, 19th October 2006 21:34 GMT

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The Google ad steamroller shows no sign of slowing down, with the company reporting a huge increase in net income in Q3.

The search advertising firm posted net income of $733.4m - 92 per cent on Q3 '05 - on net sales of $1.86bn (70 per cent up on last year). Gross revenues, including traffic acquisition costs (the commission paid to partners), was $2.69bn.

Today's results show that Google is gaining market share against Yahoo!, its closest mass market rival, which posted a decidedly flat quarter three yesterday.

Google looks set to pull ahead even further: recently it has become the advertising gateway for the net's hottest two new properties, YouTube and MySpace. The price Google paid for YouTube -$1.65bn - was of course too much, but there is a huge amount of advertising inventory on its new subsidiary to play with. If anyone can fill all those ad slots, Google can.

Google has an ad repping relationship only with MySpace. Right now, News International, MySpace's owner, is happy to let Google handle advertising at MySpace and some other internet properties, in return for an estimated $900m over three years. But at some point, surely, Rupert Murdoch and other Big Media bosses will attempt to regain control over their own classified advertising. Until that day, Google will rule the roost. ®

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