Google's first-quarter net income rose 31% to $3.1 billion or $4.12 a share, vs. $1 billion or $3.18 per share a year ago. Revenue, which was 51% international, was up 42% to $5.19 billion for first quarter over the year-ago period. The company's stock, which had been slumping, jumped almost 17% to above $500 a share on the news.
What's good for Google ...
But Google's strength is good news for online advertising as a whole. As the conventional wisdom went, if Google were to have a bad quarter it would spell bad news for an industry that has laid claim to being less susceptible to economic woes.
The company said it hadn't felt any macroeconomic downward impact.
"We've looked at this really carefully, and we do not see an impact as of this time," said CEO Eric Schmidt. "But we've also had the internal conversation of what would happen if it were to occur. Our position is we're well positioned, if economics change, to continue to do well because we're so targeted and targeted advertising does well in pretty much most scenarios."
In fact, management suggested it was seeing growth despite a few soft sectors.
"We saw in Q1 a bit of slowdown in retail and some postponement of budgets," said Omid Kordestani, senior VP-global sales and business development. "We haven't seen anything that significantly indicates one vertical or another is at risk here. We're just going deeper in these accounts, and in some cases when budgets are delayed, it's made up by other categories."
Boosted by DoubleClick
Google was bullish on display advertising and said to expect product introductions related to its acquisition of DoubleClick in the next couple of months. The company believes it is positioned to become the world's biggest display provider and that more than 90% of its daily impressions are eligible for display ads.
Executives also touched on social-media inventory monetization, saying that it has applied many new technologies, including demographic targeting, to the inventory. Three months ago, Google executives made comments about social-network inventory being more difficult to monetize, which set off speculation about whether the Google-MySpace ad deal was faltering.
"Demographic targeting has been very successful," said Larry Page, president of products. "The challenge and opportunity is there's a huge amount of inventory. ... It takes some time for advertisers to realize they're there and start targeting effectively."