April 20, 2006
The first quarter has been a boon for the Internet companies that have strong advertising models. Google (GOOG) Inc. added another boost to the sector as it posted huge profits for the three month period, as they rose 60 percent, raising way past the estimates that analysts made. It also strengthened their position as the number one Web advertising company.
The company reported that it earned $592.3 million, which equates to $1.95 per share, in the first quarter. That is measured against the $369.2 million, or $1.29 per share they earned during the same period last year.
This marks the first time in Google's history that their total revenue has reached over $2 billion in a quarter. The total revenues were $2.25 billion, which was a 79 percent improvement over last year's $1.26 billion.
After the paying of commissions to their partners, Google's total was $1.53 billion.
One of the very positive things to consider in these numbers is that in spite of the new accounting rules which require companies to now subtract their employee stock options as an expense, they are still showing fantastic numbers. Yahoo (YHOO) Inc. had a similar experience in their numbers after expenses.
To show you how well they would have done if these new rules, which went into effect this year, weren't there, they earnings would have been $2.29 a share, which is huge. Most analysts were estimating an increase of $1.97 a share. Google went beyond expectations by $90 million dollars for the quarter.
Since its addition to the Standard & Poor's 500 index last month, their shares have increased by over 20 percent.
These seems to be good news for the online marketing community as a whole as many have direct connection to Google's success. With the growing addition of new online customers, this will probably be a trend that continues, although not at the pace we've seen in the first quarter, at least not over the long-term.
