Feeds

Google profits climb 19% amid 'difficult environment'

Schmidt and Co. hail YouTube 'trajectory'

Beginner's guide to SSL certificates

CEO Eric Schmidt says Google has yet to find a mathematical model that can predict the future of the worldwide economy. But there's little doubt the company has developed a search ad monopoly capable of weathering the worst financial downturn since the Great Depression.

In the quarter ending June 30, Google revenues climbed to $5.52bn (£3.36bn), a 3 per cent increase over the same quarter last year. And as the company continues to cut costs amidst the global economic slump, profits reached $1.48bn (£0.9bn), a 19 per cent leap.

During a conference call this afternoon with industry analysts and reporters, Google continued to congratulate itself. "[We've] had a good quarter, one that demonstrates our resilience in what continues to be a difficult environment," Schmidt said. "We implemented careful cost controls to help our performance. Making our business more efficient has been our goal for the last two quarters, and it should put us in a good position to benefit from the eventual recovery - whenever that occurs."

Although Schmidt explained that Google can't predict the future, he seemed to indicate that one day it would. "It's too early for us to tell when the recovery will materialize. I wish that we could just prove it, that we could just do the analysis and figure it out, but we don't know how to do that yet."

In the meantime, the Mountain View Willy Wonka said, Google is streamlining its business without cutting back on what he calls innovation. "History shows that companies that invest in innovation during downturns emerge stronger than their cost-cutting competitors," he said. As an example, he cited the Google Chrome OS. But we're not quite why this would be considered innovative. It's a Linux kernel paired with a browser and some hardware drivers.

Schmidt boasted of revenue gains from Google Apps sales, mobile ads, and even YouTube display ads. But the company's core search and text-based AdSense ads for third-party websites continue to carry the load. Google-owned sites generated revenues of $3.65 billion (£2.22bn), or 66 per cent of the company's total revenues, while AdSense revenues reached $1.68bn (£1.02bn), 31 per cent of the total.

Yes, total revenue growth was a mere 3 per cent. But CFO Patrick Pichette boasted that if last year's dollar exchange rates were applied to this year's Q2 numbers, revenues would be $500m (£305m) higher. Google has compensated for the strong dollar at least in part, thanks to $124m (£76m) in benefits from hedging programs Google launched last year to guard against changes in foreign exchange rates.

Google's aggregate paid clicks - that is, paid clicks across all Google sites and partner sites - increased 15 per cent over the previous year. And though the cost of each click is down roughly 13 per cent, Google vp Jonathan "Perfect Ad" Rosenberg indicated that although ad bids had been down earlier in the year, they've now stabilized.

"Bids tended to decline earlier this year," he said. "And are no longer declining now - across the board."

But Google picked up some of the slack by slashing costs. In March, the company jettisoned about 200 sales and marketing folk, while shutting down anemic newspaper and radio advertising operations. Pichette said that year-over-year, operating expenses were roughly $120m (£73m) lower, and they were flat quarter-over-quarter.

Following all the back-and-forth over how much money YouTube may be losing, Schmidt and Co. also made a point of telling analysts and reporters they were pleased with the "trajectory" of the traditionally revenue-challenged video-sharing site.

According to Rosenberg, "monetized views more than tripled over the past year," saying the company is "monetizing billions of views of partner videos every month." Of course, the company - despite several requests from analysts - would not provide any additional insight into YouTube revenues.

"We don't give the economics of YouTube," Pichette said. "What we can tell you is that we're really pleased with the trajectory of YouTube and we're really pleased with it's revenue growth and in the not too distant future, we see a very profitably business for it." ®

Beginner's guide to SSL certificates

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
DOUBLE BONK: Testy fanbois catch Apple Pay picking pockets
Users wail as tapcash transactions are duplicated
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
In the next four weeks, 100 people will decide the future of the web
While America tucks into Thanksgiving turkey, the world will be taking over the net
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.