The search giant’s profits beat Wall Street expectations, netting a cool billion dollars in Q1 – 69 per cent up from last year’s paltry $592m. Total revenue was $3.66bn, 63 per cent up from last year’s $2.25bn
CEO Eric Schmidt told anaylysts: "We are ecstatic about our financial results this past quarter. Our core business is very strong. It is the core business that is driving our success."
Google’s market capitalisation is now $147bn, making it bigger than Intel and IBM. Nearly all of its revenue currently comes from people paying to be at the top of the list against a keyword search, but if its proposed acquisition of DoubleClick goes through it will also have a huge banner ad business.
This move is being opposed by Microsoft, which lost out in the auction for DoubleClick, on the grounds that it is anticompetitive. Despite the fact that the irony of complaints of anticompetitive behaviour from Microsoft would even be recognised by Alanis Morrisette, there does seem to be a serious issue here: How much competition is there in the online advertising market?
Online intelligence outfit Hitwise puts Google’s share of the US search market at 64 per cent, Yahoo!’s at 21 per cent and Microsoft’s at nine per cent. Yahoo! has recently reported a Q1 profit drop of 11 per cent.