Google profits up 31%, quashing fears of online ad slowdown

Google is announcing a 31% increase in Q1 profits to USD1.31bn, soothing market fears of an online advertising slump sparked by analyst reports earlier in the year. The company saw net revenue growth of 46% for the period to USD3.7bn, beating previous estimates of 42%.

Total sales rose 42% to USD5.19bn for the quarter, with over 50% of earnings coming from overseas sales for the first time, a slump in the value of the Dollar driving down US income. Despite industry fears of an online advertising slowdown following revelation that Google was seeing a drop in paid clicks from ads on its search pages, Google re-iterated the dropping click values, down more than 20% on the year before, were a result of its restructuring of advertising systems to minimise the number of accidental clicks reported and a cleaning out of low-quality advertising.

Google says that it expects the better quality advertising and commersurate increased price per click will see its revenue growth remain positive in the sector and that the projected US economic downturn is not being reflected in consumer activities as yet, with users expected to respond favourably and with more commitment to the higher quality ad content.Company shares dropped 1.2%, USD5.50, to USD449.50 prior to the announcement, rebounding to increase 12% in after hours trading following the report.

Published by Reinout te Brake

Reinout is a games investor and strategic business consultant specializing in the games industry. Reinout established his credentials through his own successful investments, start-ups, consulting and (advisory) board positions that led through time to strong bonds with key stakeholders in this fast paced industry. He is known for his outstanding results in the gaming industry. He has worked with many game studios around the globe and is therefore well known in the international gaming industry. Check out his games podcast;

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