October 13, 2011 / 11:10 PM / 6 years ago

Google's Page: 'We Had a Great Quarter!' - Earnings Up 33% on Revenue of $10B

As Google announced financial results for the quarter ended Sept. 30, 2011 Thursday, CEO Larry Page crowed in a statement, "We had a great quarter.”

Uh, yeah.

Revenue was up 33 percent year to year for the Mountain View, Calif. internet search giant, while quarterly revenue was just short of $10 billion.

The company's big social media launch, Google+, just passed the 40 million user mark. 

"People are flocking into Google+ at an incredible rate and we are just getting started," Page boasted.

Wall Street was pleased enough with the report — analysts had predicted revenue of around $7.2 billion and an increase of $8.74 a share — and quickly boosted the company's stock price 6 percent, climbing $33.37 to $592.36.

The revenue gains were about $200 million greater than analysts had predicted, cementing the notion that the search engine, with its accompanying and rapidly increasing market penetration for its Android mobile operating system, is one business that's showing immunity to recessionary times.

Still,  Android has been dogged by patent infringement claims from competitors, notably Apple, which is  determined to fight Android off in European markets. (Google's acquisition of Motorola was largely a move to acquire a slew of potentially useful patents).

Also, the Federal Trade Commission's anti-trust hearings against the company seem likely to expand in scope  and vigor, and there are no guarantees the company won't be jolted by the eventual results.

"When I look back at the last quarter, the word that springs to mind is, `Gangbusters,'  Page exulted during the call.

With two robust growth quarters under his belt since former CEO Eric Schmidt ceded him the position, Page has quelled the initial Street uneasiness, even as he's spent a fair amount of the company's capital on R&D, salary raises, and a hiring jag that has seen the addition of nearly 2,600 workers in the third quarter, bringing total personnel to over 31,500.

Page admitted that the addition of about 7,000 employees since the end of last year, brings the 13-year-old company to "the edge of what is manageable."

While Google's operating expenses rose by nearly 40 percent to $6.1 billion, Page has scrapped some 20 potential products already this year as he focusses on making Google + a stronger entrant in the race with Facebook and that service's 800 million users.

The presentation and subsequent Q&A showed Page to be guarded about any content plays, and no mention was made of speculation that Google has its eye on Hulu—which potential target had taken itself off the market by day's end.

Google reports its revenue, per industry standards, on a gross basis without deducting traffic acquisition costs (TAC). In the third quarter of 2011, TAC totaled $2.21 billion, or 24% of advertising revenues.

Other highlights of the report included:

Google Sites Revenues - Google-owned sites generated revenue of $6.74 billion, or 69 percent of total revenue, in the third quarter of 2011. This represents a 39 percent increase over third quarter 2010 revenues of $4.83 billion.

Google Network Revenues - Google’s partner sites generated revenue, through AdSense programs, of $2.60 billion, or 27 percent of total revenue, in the third quarter. This represents a 18 percent increase from third quarter 2010 network revenue of $2.20 billion.

International Revenues - Revenue from outside of the United States totaled $5.3 billion, representing 55 percent of total revenue in the third quarter, compared to 54 percent in the second quarter of 2011 and 52 percent in the third quarter of 2010. 

Paid Clicks– Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 28 percent over the third quarter of 2010 and increased approximately 13 percent over the second quarter of 2011.

Cost-Per-Click– Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 5 percent over the third quarter of 2010 and decreased approximately 5 percent over the second quarter of 2011. Related Articles:  Google, Labels Partner on Music Search 5 Screenwriters Who'd Do Justice to 'Google: The Movie' Bitter Pill: Google Forfeits $500M Generated by Online Canadian Pharmacies

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