Article from SFGate.
“Google reported sales that beat estimates Thursday as businesses spent more on advertising to online consumers.
Third-quarter sales, excluding revenue passed on to partner sites, rose to $7.51 billion, Google said on its website. That topped the $7.23 billion average of analysts’ estimates compiled by Bloomberg. Net income climbed 26 percent to $2.73 billion ($8.33 per share) from $2.17 billion ($6.72) a year earlier.
Google, despite concerns about the economy, is benefiting from growing demand for online advertising, including search-based marketing that makes up most of its sales. Search-based advertising should reach $37.7 billion this year globally, up 23 percent, while total Internet ad spending should climb 20 percent, according to media researcher MagnaGlobal.
“Search is good,” said Kerry Rice, an analyst at Needham & Co. in San Francisco who rates the stock a buy and doesn’t own shares. “Paid search is still the biggest component of online advertising, and Google’s obviously going to win the vast majority of that dollar.”
Google rose 1.9 percent to close at $558.99 on the Nasdaq Stock Market. The shares have dropped 5.9 percent this year.
Third-quarter profit, excluding some items, was $9.72 a share, exceeding the $8.76 average of analysts’ estimates.
Even with more competition from Microsoft, Google picked up market share in the United States, according to Efficient Frontier Inc., which helps companies promote products online. Google had 82 percent of spending on search advertising in the third quarter, up from 81 percent in the two previous quarters.
Microsoft, which provides search and ad services for Yahoo’s U.S. websites under a new agreement, had 18 percent, down from 19 percent in the previous two quarters, according to Efficient Frontier.”
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