Google’s 2Q Net More Than Doubles
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Google Inc., owner of the most-used search engine, said second-quarter profit more than doubled as the company took market share from Yahoo! Inc. and Microsoft Corp.
Net income rose to $721.1 million, or $2.33 a share, from $342.8 million, or $1.19, a year earlier, Google said yesterday in a statement. Revenue rose 77% to $2.46 billion. Excluding sales passed on to other Web sites, revenue was $1.67 billion, compared with the $1.65 billion estimate of Jefferies & Co. analyst Youssef Squali.
Google parlayed its dominance of the Internet search market into a rise in profit. Google beat analysts’ predictions with software that better targets ads to consumers, unlike Yahoo! Inc., which this week reported sales that missed estimates.
Google’s search engine is used about three times more than Yahoo’s, according to ComScore Networks Inc.
“These numbers showcase that Google is predominant in the areas where they’re playing,” an analyst at San Jose, Calif.-based Enderle Group, Rob Enderle, said. “Yahoo’s numbers indicated they were being hit by Google.This confirms that.”
Net income included a $55 million gain from the sale of a stake in Baidu.com Inc. Profit excluding one-time items was $2.49 a share, beating the $2.25 estimate of Squali, whom StarMine Corp. ranks among the most accurate Internet analysts.Analysts on average predicted profit of $2.22,based on a Thomson Financial survey of 32 estimates.
Shares of Mountain View, California-based Google, down 7% this year, rose $9.88 to $397 in extended trading. They earlier fell $11.88 to $387.12 at 4 p.m. in Nasdaq Stock Market composite trading.
Google stuck to its policy of not forecasting earnings, a practice CEO Eric Schmidt, 51, said is designed to prevent managing earnings to analysts’ estimates.
“We’re very, very happy with having such a strong quarter,” in a period that is seasonally weaker, Schmidt said on a conference call with analysts.
The results allayed concerns about the strength of Internet search after Sunnyvale, California-based Yahoo said second-quarter revenue was $1.12 billion. Yahoo also delayed the introduction of online advertising software designed to match Google’s systems.
