Google doubles profit in Q2

NEW YORK: Google Inc. reported Thursday its second quarter net profit has more than doubled at $721 million, compared to $342.8 million in the corresponding quarter of the previous year. Its sales went up 77 per cent to $2.46 billion.
The results indicated the search company could overcome the slowing growth that severely affected rivals like Yahoo and that it had been able to consolidate and improve its position as the No 1 player in the online search advertising.
The results enthralled investors and sent the company’s shares up by 2 per cent in after-hour trading.
The company said better tax rates and higher revenue from Google.com than through advertising affiliates helped it to post higher profit margins.
Subtracting commissions paid to content partners, the net revenue rose to $1.67 billion. It paid out traffic acquisition costs of $785 million, or 32 per cent of advertising revenues. In the corresponding last year quarter, the payout was 36 per cent.
According to Nielsen/Net Ratings earlier this week, Google had provided 44.7 per cent of U.S. search results in the second quarter and the number of ads its search pages received increased by 82 per cent from the year earlier period.
Google said its international sales grew at a faster rate than revenue in the U.S. on a quarter-over-quarter basis. It now accounts for 42 per cent of total sales. Europe had the highest growth with the U.K. and Germany representing its strongest market.It got $1.43 billion, or 58 per cent of its total revenue, from its own websites, almost double the amount a year ago. Advertising revenue from its network partners rose at a slower rate of 58 per cent to $997 million, or 41 per cent of total revenue, it said.
The company reported that stock-based compensation charges totaled $109 million. It received $55 million by selling the 2 per cent stake it had in Chinese web search portal Baidu Inc.
Chief executive Eric Schmidt said the company could have such a strong quarter in a seasonally weak period. He said, “The opportunities before us really are unlimited at present. It’s another good day and a good quarter at Google.”
Google’s co-founder Sergey Brin said its latest product, Google Checkout, is having good adoption rates. It is a payment system that users can adopt to make easy payments for goods bought through Google ads. Brin said he hoped the benefits offered to the users will increase advertisers’ spending and bring more advertisers to Google.
The company added some 1,152 employees in the second quarter, taking its total headcount to 7,942.