Google Grows Profit and Revenue in Q1

Google posted solid growth in its revenue and profit during 2008's first quarter and exceeded Wall Street expectations in both categories, amid widespread concern that the search engine giant's results would be weak.

Google generated revenue of US$5.19 billion for the quarter that ended March 31, up 42 percent compared with 2007's first quarter, Google said Thursday.

Excluding the advertising commissions it pays to Web site publishers that carry its ads, Google posted revenue of $3.7 billion, beating the $3.608 billion consensus expectation of financial analysts polled by Thomson Financial.

The company had net income of $1.31 billion, or $4.12 per share, compared with $1 billion, or $3.18 per share in 2007's first quarter.

On a pro-forma basis, excluding certain items, net income was $1.54 billion, or $4.84 per share, topping analysts' expectation of $4.52 per share.

Google's ability to continue generating solid revenue and profits from its search advertising business came under scrutiny in recent months, as several independent studies suggested that people were clicking less than expected on its pay-per-click ads and that rival Yahoo is stealing market share. However, the first quarter results at first glance don't seem to indicate any major breakdown in Google's revenue-and-profit making machine.

Google's first quarter results include the operations of DoubleClick starting on the date when the acquisition closed, March 11, until the quarter's end, but their impact was immaterial to revenue and "only slightly dilutive" to net income and earnings per share, Google said.