Feeds

Google money machine returns to overdrive

'An extraordinary end to a roller coaster year'

Secure remote control for conventional and virtual desktops

Google's top secret money machine returned to overdrive during the fourth quarter, with the web giant reporting a 17 per cent leap in revenue from a year ago.

In October, as the company announced its Q3 earnings, Mountain View chief Eric Schmidt told the world that the worst days of the worldwide recession were over, and clearly, they are - at least for Google.

"This was a very strong quarter for Google and an extraordinary end to a roller coaster year by any measure," Schmidt said during a conference call with reporters and industry analysts.

After Q3, Google also said it planned to once again boost its spending, acquiring more companies and hiring more employees, and today, Schmidt confirmed this will continue through 2010. "It was clearly the right decision," he said, adding that the company will invest in more engineers and more sales staff in "key areas."

During the economic Meltdown, Google expanded "ad coverage" on its web-dominating search engine, letting more ads onto more pages. Throughout the recession, revenues expanded sequentially during all but one quarter, and that quarter - Q1 2009 - was still an improvement over the previous year.

That quarter was also profitable, after the company made some significant spending cuts.

But now that the economy is recovering - and big players are spending more - the company has turned the coverage dial the other way. According to AdGooRoo - a search marketing consultant that tracks search ads from a network of servers across the globe - Google banned about 30,000 advertisers from its AdWords platform at the beginning of December.

As Google shrunk coverage, aggregate paid clicks - across Google sites as well as AdSense third-party sites - leapt 13 per cent from the previous year. And the average cost per click jumped 5 per cent. This led to revenues of $6.67 billion, up from $5.7bn in the fourth quarter of 2008, and profits climbed to $2.19 billion, a 35 per cent leap.

Google sites generated revenue of $4.42bn, 66 per cent of the total, while partner AdSense sites generated $2.04bn, 31 percent of the total.

The company's traffic acquisition costs (TAC) - what it pays to AdSense sites - were 27 per cent of its revenues in the fourth quarter, just as they were in Q4 2008. During today's call, an analyst said that many advertisers are claiming that their individual slice of the pie is shrinking, and though chief financial officer Patrick Pichette seemed to acknowledged this trend - at least during the fourth quarter - he downplayed its significance. "There's no big surprise there, and we continued to have greater partnerships with our AdSense partners," he said. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
MI6 oversight report on Lee Rigby murder: US web giants offer 'safe haven for TERRORISM'
PM urged to 'prioritise issue' after Facebook hindsight find
Assange™ slumps back on Ecuador's sofa after detention appeal binned
Swedish court rules there's 'great risk' WikiLeaker will dodge prosecution
NSA mass spying reform KILLED by US Senators
Democrats needed just TWO more votes to keep alive bill reining in some surveillance
'Internet Freedom Panel' to keep web overlord ICANN out of Russian hands – new proposal
Come back with our internet! cries Republican drawing up bill
What a Mesa: Apple vows to re-use titsup GT sapphire glass plant
Commits to American manufacturing ... of secret tech
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.
Designing and building an open ITOA architecture
Learn about a new IT data taxonomy defined by the four data sources of IT visibility: wire, machine, agent, and synthetic data sets.
10 threats to successful enterprise endpoint backup
10 threats to a successful backup including issues with BYOD, slow backups and ineffective security.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?