April 15th, 2011

Google bullish with sales up 27%, but profits below expectations

Google announced its res­ults at a quarterly earn­ings call this week. Sales were up 27% for the quarter ended March 31st with rev­en­ues at $6.54 bil­lion, an increase from $5.06 bil­lion dur­ing the same period last year. This was ahead of many ana­lyst expect­a­tions of $6.32 billion.

How­ever, quarterly profit was behind expect­a­tions as oper­at­ing expenses increased by 54% to $2.84 bil­lion. Google boos­ted its spend­ing sig­ni­fic­antly on both mar­ket­ing and employ­ees dur­ing the first three months of the year.

Employee num­bers and cost per employee have both risen over the year. Google now has26,316 employ­ees, up from 20,621 a year ago and the com­pany handed out 10% across-​the-​board salary increases this year.

Cap­ital expenses have also risen. Google repor­ted cap­ital expendit­ures of $890 mil­lion, up from $239 mil­lion dur­ing the first quarter of 2010.

How­ever, Google remain bullish and their sales remain strong. Paid clicks were up 18% year-​over-​year, while the aver­age cost-​per-​click was up 8%. Over­all, sales at Google-​owned sites were up 32% to $5.88 bil­lion, while sales gen­er­ated through AdSense increased 19% to $2.04 billion.

Google’s exec­ut­ives said the com­pany would not be slow­ing down its mar­ket­ing spend­ing, espe­cially on Chrome, which they described as being “key.”

You Tube
In response to Google reportedly invest­ing as much as $100 mil­lion on ori­ginal con­tent on You Tube, SVP Jeff Huber con­firmed that You­Tube was inter­ested in “long form premium con­tent”. Huber also men­tioned its recent pur­chase of webisode maker “Next New Net­works” as reflect­ive of con­tent the site wanted to emphasise.

On Mobile, Huber said more than 350,000 Android devices a day are being activ­ated and more than three bil­lion Android apps had been installed. He referred to the smart­phone as being “an exten­sion of the per­son” that would play a role in an increas­ing num­ber of human beha­vi­ors. Exec­ut­ives also dis­closed that the com­pany had “tripped” into a billion-​dollar mobile busi­ness, which was why Google is so bullish about its future.

1 comment to Google bullish with sales up 27%, but profits below expectations

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