Feeds

Google says Meltdown's darkest days are over

Chocolate Factory whips out checkbook

Website security in corporate America

Google has decreed that the darkest days of the global economic meltdown are now over.

This afternoon, as the company announced a 7 per cent leap in third-quarter revenues, Google boss Eric Schmidt said: "While there is a lot of uncertainty about the pace of economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future."

The Chocolate Factory's Q3 revenues reached $5.94 billion, up from $5.54bn in the same quarter last year, while profits climbed to $1.64bn, a 27 per year-on-year leap. But the salient point is that Schmidt and company say they're once again ready to spend the big dollars.

Amidst the meltdown, Google endured one quarter that was less astronomical than what Wall Street has come to expect from the Mountain View search monopoly, but even those Q1 numbers were impressive by ordinary standards. Profits actually rose to $1.42bn.

As the economy shrunk, the Chocolate Factory buoyed its revenues by actively increasing the number of ads showed on its search pages. Google's ad coverage is limited by the keywords advertisers are bidding on and their daily ad budgets. But because Google controls such a large swath of the search market - more than 60 per cent in the US, according to comScore - advertisers are generally willing to pay for as much traffic as Google will give them. Even Google said as much during the meltdown's darkest days.

"Our experience is advertisers are willing to take all the clicks we can give them at the current CPC [cost per click] - even in tough times," Google senior vice president Jonathan "Perfect Ad" Rosenberg said last fall. "We think that will continue to be true because nobody wants to turn away a customer."

During Q1 - a traditionally slow quarter for online advertising - the average number of ads per Google keyword reached a high of 5.25 in February, up from 4.39 in the shopping-obsessed month of December.

The previous year, Google had worked to shrink the number of search ads on its pages. But as co-founder Sergey Brin admitted during a now famous earnings call last summer, the company cranked the dial the other way as the economy waned. More ads mean more clicks, and more clicks (can) mean more money.

This ad-crank continued on into Q3 of this year, judging from the latest numbers from independent search ad watcher AdGooRoo. Clearly, as the economy shrunk, Google was battling a consumer tendency to shop for less stuff - this can mean fewer clicks - and it would seem the trend has reversed.

Google says paid clicks - clicks on ads served on Google sites and its partners sites - rose 4 per cent from the Q2 and 14 per cent from the same quarter last year.

And so, Google is willing to spend "heavily" again. As the economy shriveled, Google also tightened its proverbial belt, shutting down various services and even axing some staff.

"We're going to continue to invest in long-term growth," Schmidt said during a conference call this afternoon with analysts and reporters. "We really tested our management team, and I want to say I'm very proud of the management team getting us through what could have been a very significant [problem] for Google."

Eric Schmidt did not acknowledge that extended crank of the Google ad dial. But he did cite "tight control over costs combined with continued innovation in search ads."

But that tight control is no more. "We have huge opportunities ahead of us, and we have the resources and expertise to invest heavily in long term growth for the benefit of users, customers, and sharesholders," Schmidt said. He added the company intends to invest in new employees - "we're already stepping up our hiring" - and what Schmidt likes to call "innovation." ®

Reducing the cost and complexity of web vulnerability management

More from The Register

next story
Hey, Scots. Microsoft's Bing thinks you'll vote NO to independence
World's top Google-finding website calls it for the UK
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
OECD lashes out at tax avoiding globocorps' location-flipping antics
You hear that, Amazon, Google, Microsoft et al?
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.
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.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.