Posted on 10/19/2006 4:10:43 PM PDT by Alter Kaker
SAN FRANCISCO (AP) - Google Inc.'s (NASDAQ:GOOG) third-quarter profit nearly doubled in the latest demonstration of the Internet search leader's phenomenal financial firepower.
The Mountain View-based company said Thursday that it earned US$733.4 million, or $2.36 per share, for the three months ended in September. That compared with net income of $381.2 million, or $1.32 per share, at the same time last year.
If not for expenses to cover employee stock compensation, Google said it would have earned $2.62 per share - well above the average estimate of $2.42 per share among analysts polled by Thomson Financial.
Revenue for the period totalled $2.69 billion, a 70 per cent increase from $1.58 billion last year.
After subtracting the commissions paid to Google's ad partners, revenue fell to $1.86 billion. That figure also topped analyst estimates by about $50 million.
Surpassing Wall Street's lofty expectations is nothing new for Google, which has blown past analysts' projections in all but one of the nine quarters since its much-ballyhooed initial public offering of stock in August 2004.
The remarkable run has established Google has one of the world's corporate titans just eight years after co-founders Larry Page and Sergey Brin started the business in a Silicon Valley garage - part of a house that the company just bought as a memorial to its success.
"Our third quarter results are a testament to the strength of our network of advertisers and partners, as well as our continuing focus on users," Google chief executive Eric Schmidt said.
Google shares gained $6.75 to close at $426.06 on the Nasdaq stock market before the release of the third-quarter results, then added another $13.85, or 3.3 per cent, in after-hours trading.
Google's third-quarter performance reflects the company's widening advantage over its main Internet rivals. Yahoo Inc. (NASDAQ:YHOO), which runs the Internet's second largest advertising network behind Google, has been hurt by slowing revenue growth most of this year - a problem that contributed to a 38 per cent drop in its third-quarter profit.
"The difference between Google and the second-and third-place players has become enormous," said Global Equities Research analyst Trip Chowdhry.
Google's search engine has become a moneymaking machine as it continues to attract more users, enabling the company to deliver more of the short text-based ads that account for most of its profits.
In September, Google's held a 45 per cent share of the U.S. search market, up from 44 per cent in August, according to comScore Media Metrix. Yahoo's search share dipped to 28 per cent in September, down from 29 per cent the previous month while Microsoft Corp.'s (NASDAQ:MFST) share continued to hover around 12 per cent, Media Metrix said.
Sell all yer gold...... buy google. (/sarcasm)
Sarcasm all you want, but that's one hell of a company they have there.
I shoulda put /joking. BTW, I have some of both (gold & google).
It's rediculous. Googles doesn't own
733.4 million in actual property of *any*
kind...much less the over $10 Billion they
are supposed to be worth.
Gold and fools gold, In My Opininion..
IMO...someone is eventually going to point
out the Emporer has no clothes.
What are you talking about? They just picked up $733.4 million in net profit this past quarter. That's cash in the bank.
Incorrect, they own space on millions of websites. An actual and valuable marketing commodity. Their primary source of income, web advertising, is the fastest growing revenue source today, and they own the lions share of the market. In addition, their online offerings draw millions of hits a day, and that alone gives them leverage to charge companies almost whatever they like for marketing exposure. They are fairly uncontested in their primary markets, and have the capital and infrastructure to back them up. Kind of makes me with I had gotten into the SE game a while back. But hey, hindsight right?
When they go live with their personal internet-based services/applications, look out.
Just think, you'll be able to keep the PC you have today for another 5-8 years and never have to upgrade your OS or desktop applications.
On the Microsoft front, you'll need 2GBytes of memory just to run Vista, with early testing showing 4Gbyte as a good start if you want to run Office 2007 over Vista. Longhorn Server, on the other hand, will be a BIG HIT in corporate America.
I can see this market dividing.
I remember the same kind of talk about Yahoo...
Just heard them being derisively described
a day or two ago as:
"Oh, they are just so..*90's*!"
Books will one day be written on the occult geometry of the garage.
Yahoo and MSN will begin to make their push. The fact is Yahoo still holds a good enough market share in online advertising and social components that they will continue to be a player. But Google obviously new their market well and did all the right things to capture it. It is going to be extremely difficult and expensive for both Yahoo and MSN to usurp any market share from the trillion billion monster.
They were darn good places to start rock bands, too!
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Sorry -- I screwed up!
I wonder how long this bubble will run.
And where did Yahoo go wrong? Putting too much junk and adverts on their search page. That is all it was. People choose to use google because it loaded faster and was a simple blank page with a search field in the middle. That's my analysis anyway.
The P/E ratio is right around 60. That's definitely high, but it's not necessarily insane, especially with the company's fast growth. Now obviously the growth won't continue forever, but it'll probably continue in the near term.
But, Ford developed his internal combustion engine in the kitchen because there weren't garages then.
As a google share holder I am giddy. That said these left wing nut jobs are the first to call for windfall profit taxes on big oil
The only "minor" disadvantage is that you basically sign off any and all rights to your data when you store it on Google's servers.
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