Original URL: http://www.theregister.co.uk/2007/04/19/google_first_quarter/

Ads surge secures Google earnings

CEO 'ecstatic'

By Gavin Clarke

Posted in Financial News, 19th April 2007 21:53 GMT

Google has delivered Wall Street a pleasant Q1 surprise, blowing past expected results while reconciling its move into new partnerships and offline markets.

Chief executive Eric Schmidt declared himself "ecstatic" with the quarter's results, as Google reported a 69 per cent increase in income to $1bn on revenue that jumped 62.5 per cent to $3.6bn.

Earnings per diluted share (EPS) hit $3.18, up from $1.95. The internet's favorite search engine would have landed $3.68, beating the anticipated $3.30, had it not been for expenses related to employee stock compensation.

Google's own websites outgrew its AdSense business while Google had to share a growing percentage of its AdSense revenue with partners. Sixty two per cent of revenue, $2.28bn, came from Google.com - a 76 per cent increase. Partner sites accounted for 37 per cent of revenue, or $1.35bn, an increase of 45 per cent.

Traffic Acquisition Costs (TAC) were flat at 31 per cent, or $1.13bn, between the fourth and third quarter.

Announcing the quarter's results, Schmidt talked up Google's move into offline advertising, in print and radio with Clear Channel. He also mentioned Google is developing technology called Cleaner Content that would let internet publishers remove content from sites like YouTube and Google Video in compliance with the Digital Millennium Copyright Act (DMCA). Google is embroiled in a $1bn copyright action with Viacom over hosting of content on YouTube.®