Google Inc. (NDAQ: GOOG) announced high-than-expected net income of $1.55 billion on $5.19 billion in revenues. The search giant saw a 42% increase in revenue growth compared to the first quarter of 2007 and a 7% increase compared to the fourth quarter of 2007. The strongest growth was seen in international revenues, which finally increased to more than half of its total revenues.
"Our ongoing innovation in search, ads, and apps helped drive healthy growth globally across our product lines, yielding another strong quarter for Google," said Eric Schmidt, CEO of Google. "As we integrate DoubleClick into our advertising platform, we see exciting new ways to improve the user experience and increase value for our advertisers and partners. Also, while exercising operational discipline, we continue to explore opportunities that add value to users everywhere and to Google in the long term."
Google reported that 66% of its revenues were derived from websites that it owns compared to 33% from its content partners. This marks a continued shift towards creating its own revenues, which is much more profitable in the long-run. The search giant also noted that its acquisition of DoubleClick was immaterial to revenue and only slightly dilutive to both GAAP and non-GAAP operating income, net income and earnings per share for the first quarter.
The stock jumped 10% after hours on the news as investors breathed a collective sigh of relief. Many were concerned that the company would post a loss following weakness in pay-per-click advertising predicted by research firm comScore. The huge surprise to the upside has many investors newly bullish on the stock and confident that it will be able to overcome any difficulties in the U.S. economy.
In the end, these factors make GOOG a stock worth watching going into the future. Many are hoping that this news will provide a boost to the technology sector that is already fresh off of good news from IBM.
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