Google Q1 profits up after cutting jobs
Google has recently begun taking a harder line on expenses (Photo by David Paul Morris/Getty Images)
Friday April 17 2009
Google, owner of the world's most popular search engine with a European HQ in Dublin, reported an increase in first- quarter profit after cutting jobs and jettisoning some businesses.
Net income was $1.42 billion, or $4.49 a share, compared with $1.31 billion, or $4.12, a year earlier, the company said yesterday in a statement sent by Business Wire. Excluding revenue passed on to partner sites, sales were $4.07 billion. That compared with the average estimate of $4.1 billion in a Bloomberg survey of analysts.
Google, famous for its free meals and benefits, has taken a harder line on expenses. The company announced last month it would eliminate about 200 jobs in sales and marketing. Google also is shutting down less lucrative divisions, including its newspaper and radio ads units.
"It's a good time for them to rein in costs and cut out some of the underperforming projects," said Todd Greenwald, an analyst with Signal Hill Capital Group in Baltimore. "They also probably realize they got a little bit bloated during the boom times."
Google, based in Mountain View, California, rose $9.24 to $388.74 in Nasdaq stock market trading..
US online advertising spending growth will slow to 4.5pc this year, according to New York-based research firm EMarketer. That's down from 10 percent in 2008.
Google's revenue declined from the fourth quarter, the first sequential decrease in its history as a public company. Still, the ad market might have stabilised in March, according to Marianne Wolk, an analyst with Susquehanna International Group.
Growing search volume last month may have helped make up for a decline in ad prices, said Clayton Moran, an analyst with Benchmark Capital in Boca Raton, Florida. The number of online searches surged 9pc in March over February, according to ComScore Inc. of Reston, Virginia.
Google, which gets almost all its sales from online searches, handled 64pc of U.S. queries in March, according to ComScore. Yahoo! was No. 2 with 21pc, and Microsoft had 8.3pc .
Google is seeking to expand beyond search-based text ads, which provide its biggest chunk of revenue. The company acquired DoubleClick last year to extend its reach into display advertising, including banner ads.
(Bloomberg)
