Google's feeling + after another bumper quarter

The search giant saw sales rise to nearly $7bn, smashing analyst expectations. So much for the 'end of search'.

by Emma Haslett
Last Updated: 21 Sep 2011
Looks like all is well aboard the good ship Google: the search/advertising/email/mapping/video/social networking/etc behemoth has reported surprisingly strong results (even for Google), with sales rising to $6.9bn (£4.3bn), breezing past analyst estimates of $6.6bn. Revenues rose to $9bn, a cool 32% higher than the same period last year. And its new social networking offering, Google+, hasn’t let it down: the site’s gone down a storm among early users, suggesting that Facebook may just be in for a nasty surprise…

Given its sheer size and diversity, analysts tend to use Google as something of a bellwether for the rest of the economy. This quarter, much of its success was down to ad prices, which rose 12% in the three months to June 30, against 8% during the previous quarter. That suggests that businesses are becoming more and more enthusiastic about the idea of spending cash on marketing – and if businesses have a bit of extra cash to spare, that’s good for the whole economy.

Its success hasn’t come without a cost, though. Since co-founder Larry Page took over from Eric Schmidt in February, the company has taken on another 2,452 employees, bringing the total to 28,768, signalling that growth is still a priority. According to figures by EMarketer, Google’s share of display advertising in the US should be about 9.3% by the end of the year - way above its 2009 figure of 4.5%, but still behind the likes of Facebook and Yahoo.

That said, Facebook might need to watch out: it looks like Google+ is coming up fast behind it. Having launched just two weeks ago, the new social network now has 10m users, who are sharing more than a billion photos, videos and messages a day.

Obviously, that’s nowhere near Facebook’s 750m users – and its popularity could, in part, be down to the novelty factor, ie. the limited number of users who have signed up to the service are still exploring its possibilities. But keep that enthusiasm up, and Google’s share of the ad market could be set to rocket. Mark Zuckerberg (who is, admittedly, currently the most-followed person on Google+) had better watch out… 

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