Google Attributes Revenue Growth to Advertising

Co-Founder Sergey Brin Enthusiastic About Video Search

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NEW YORK (AdAge.com) -- Once again beating Wall Street's expectations, Google reported that third-quarter profits nearly doubled, as revenue rose 70%. On a conference call today, Google Chief Financial Officer George Reyes said weaker traffic growth was offset by continued growth in online advertising.
Google said 60% of its advertising revenue came from its own sites and 39% came from members of it AdSense network.
Google said 60% of its advertising revenue came from its own sites and 39% came from members of it AdSense network.

Positive talk
"Business is very, very good here at Google, and we had an excellent quarter in all respects," CEO Eric Schmidt said.

The Mountain View, Calif., search giant said it earned $733 million, or $2.36 a share, on revenue of $2.69 billion for the period. In the year-ago quarter, Google earned $381 million on revenue of $1.58 billion. This year's strong earnings were in stark contrast to rival Yahoo's, which earlier this week reported a 38% drop in quarterly profit.

More video
Google Co-founder Sergey Brin expressed enthusiasm over video and video search in the wake of last week's announcement that Google plans to buy YouTube for $1.65 billion. "I often find the best [search] result is not a web page," Mr. Brin said of Google's plans to integrate video more deeply into the search experience.

Google said 60% of its advertising revenue came from its own sites and 39% came from members of it AdSense network -- websites and other online publishers that display Google ads. The numbers represented a slight shift from the same period a year ago when Google said 56% of its advertising came from its own sites and 43% came from its network.

Google has bested Wall Street's projections in all but one of the nine quarters since its initial public offering in 2004.

Dominating search
The company continues to increase its dominant position in search. Web traffic to Google's network of sites grew 22% in the third quarter compared with last year, according to Nielsen/NetRatings, increasing to an average monthly unique audience of 98.4 million from 80.3 million.

Google Search accounted for half of all searches conducted in September, with over 2.8 billion search queries. By comparison, Yahoo held 23% of the search market in September, and Microsoft MSN had a 9.2% share. Sponsored Search Link advertising impressions on the Google advertising platform have increased 12% from September 2005 to September 2006.

Google ranked first in four out of five search verticals -- web, local, news and images, according to Nielsen. In shopping, Google ranked third.
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