Google Reports 32 Percent Profit Hike

Google reported a 32 percent third-quarter profit jump of $2.17 billion, with display and mobile ads providing the bang analysts have been expecting

Aided by growth in display and mobile advertising, Google reported a third-quarter profit of $2.17 billion (£1.35bn) on earnings per share of $6.72, up 32 percent from the $1.64 billion on $5.13 per share tallied in Q3 2009.

Google’s Q3 revenues totaled $7.29 billion (£4.54bn), up 23 percent from the same period a year ago. Without excluding one-time items, Google notched an EPS of $7.64, compared to $5.89 in Q3 2009. Thomson Reuters analysts had expected an EPS excluding items of $6.69.

Google CEO Eric Schmidt attributed the strong results to the search engine’s growth in newer businesses like display and mobile advertising, noting in a press statement:

“Google had an excellent quarter. Our core business grew very well, and our newer businesses – particularly display and mobile – continued to show significant momentum.”

Display and mobile adverting

Jonathan Rosenberg, senior vice president of product management for Google, backed that up with some rare statistics that the company has traditionally closely guarded.

Rosenberg said display advertising on YouTube, as well as non-text ads on Google’s display and DoubleClick networks are reaping an annualised run-rate of $2.5 billion (£1.6bn).

“Clearly we’re firing on all cylinders in display,” Rosenberg said, pointing to the sector as the next multi-billion-dollar business after search advertising.

YouTube is monetising 2 billion page views a week, up 50 percent year-over year. Google is also now enjoying an annualised run-rate from ads served on mobile phones of $1 billion, with mobile search queries growing 5 times over the last couple of years.

Meanwhile, Google’s paid clicks, or those related to ads served on Google sites and those of the company’s AdSense partners, increased 16 percent from Q3 2009 and 4 percent over the prior quarter as the search engine slides into the busier holiday season.

Google to buy Twitter?

The company has $33.4 billion (£20.8bn) in the bank, a princely sum that has caused some market watchers to call for Google to acquire Twitter, which could cost $5 billion.

Instead, Google has aimed for smaller purchases that, separately, barely register as a blip on high-tech’s radar.

Together, they point to the future of Google’s search efforts and are centered on the intersection of social and mobile software, with some display ads no doubt thrown in for good measure.

In the second quarter, Google purchased social widget maker Slide, virtual currency provider Jambool, social aggregator Angstro, social gaming provider SocialDeck. This month, Google nabbed social mobile app maker Everything is the Best.