Google Profit Surges 46%

Internet Giant Beats Wall Street Projections in Q3

By Jon Hemingway -- Broadcasting & Cable, 10/18/2007 7:34:00 PM

Google recorded strong earnings in the third quarter with net income surging 46% year-over-year to $1.07 billion from $733 million. The company’s earnings per share of $3.91 beat Wall Street consensus calls for $3.78.

Google’s revenues in the third quarter rose 57% to $4.23 billion from $2.69 billion in the same period last year. Revenue generated from Google-owned sites, including video-aggregator YouTube, was $2.73 billion in the quarter, a 68% increase from the $1.63 billion recorded in Q3 2006.

Google Network revenue -- which is generated from partner sites through AdSense programs -- was $1.45 billion, a 40% rise over the $1.04 billion logged in the same quarter last year. International revenues were $2.08 billion in the quarter.

Net cash from operating activities was $1.63 billion and capital expenditures were $533 million, largely tied to information-technology-infrastructure investment.

The company’s paid clicks -- which include ads served on Google sites and on AdSense partner sites -- increased 45% from the same period last year, while traffic acquisition costs (TAC), the portion of revenues Google shares with its partners, were $1.22 billion in Q3. As a percentage of total ad revenues, TAC was 29% in the quarter.

“We are very pleased with the impressive growth we experienced across our business," Google CEO Eric Schmidt said in a statement. “Our core search advertising business experienced continued momentum driven by growth in monetization and traffic, and we are creating a wider and deeper ad system through our focus on innovation, bringing more ad formats to our advertisers."