Google is in the black

Search engine Google is making a profit and has done so for the past two quarters, according to Eric Schmidt, its new CEO and former boss of Novell.

As Google is privately held, it doesn't have to announce its financial results under US law, and so it hasn't bothered to do so. Not that Schmidt has actually supplied any figures, but the profit - he jokes - is not just because Google didn't buy any pencils last month.

Google has two main revenue sources: licence fees from its search technology (130 paying customers, including Yahoo!); and advertising.

By tying in companies' ads with the search string that users type in, Google claims to offer much better targeting. It then runs those ads on the side of the screen. According to Google, its provides a four to five times better click-through rate (i.e. people clicking on the ad to learn more) than average.

Schmidt says he is at Google to turn its crazy start-up mentality into one resembling a proper business.

In the past he has had his detractors - especially at Novell where his annual attempt to turn the company around started getting sadly comical - but we've always reckoned he's talented.

One of his main aims with Google, he says, is to expand the number of pages it accesses and to speed up its update facility, so that new content is available within hours, rather than days. A major disadvantage of Google at the moment is that you can't use it for news.

Google currently performs 100 million searches a day, and logs 1.3 billion Web pages. And it still provides the results quickly. ®