Google CEO 'Ecstatic' as Third-Quarter Profit Climbs Almost 70%

Also Clarifies Role of YouTube's 'Claim Your Content'

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NEW YORK ( -- In another robust earnings report, Google's profit grew 69% during first quarter, beating analyst expectations. CEO Eric Schmidt told analysts he was "ecstatic" about the quarter and then warned them to keep in mind the seasonally slower summer growth period.
Eric Schmidt is one happy CEO.
Eric Schmidt is one happy CEO. Credit: James Duncan Davidson

He touted recent offline media deals, including one that gave Google access to about 5% of Clear Channel Radio's aggregate inventory and just under 5% of Echostar's spot cable inventory. He also noted Google was quickly moving into display advertising, bolstered by its recent DoubleClick acquisition announcement, and video through YouTube.

Ad revenue on owned-and-operated sites
Gross revenue rose 63% over first quarter 2006 to $3.7 billion. In addition, Google managed to grow sales on its own sites faster than its partner sites. Ad revenue on Google's owned-and-operated sites, which represent 62% of the company's total revenue, was up 76% to $2.28 billion; ad revenue on partner sites grew 45% to $1.35 billion.

Sergey Brin, president-technology and co-founder, hyped innovations such as pay per action ad models and Google's website optimizer. He also touted that Google's AdSense network provides ads to 75% of the top 20 social networks.

No filtering tool on YouTube
Mr. Schmidt also clarified remarks he made earlier this week at the National Association of Broadcasters conference about a product YouTube is creating called Claim Your Content. He said the product is not a filtering tool that would block uploads of illegally distributed copyrighted content as many reports from the conference indicated, but rather a tool to automate the process of taking such content down.

"[The technology] makes it much, much more effective and much quicker to download, essentially to get us to remove inappropriately uploaded content," he said. "It's very much compliant with the [Digital Millennium Copyright Act] and we believe will address many of the operational complaints people are making about the workload that the DMCA has put on them."

Separately, a judge decided against Google's motion for summary judgment in a trademark infringement lawsuit brought by American Blind & Wallpaper Factory Inc., which means the suit could proceed to a jury trial. Google has won two earlier similar suits involving advertisers angered that competitors were buying their trademarked key words. In a 2005 case involving Geico a judge ruled it was OK to sell the search term "Geico" to Geico's competition but that using the word in the headline of an ad would be misleading and would constitute a trademark infringement.
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