Google’s quarterly profit beat Wall Street expectations, but the weak economy and slump in advertising spending took a toll on revenue growth and the price of its search ads.
Google employs around 650 people in its Irish operations.
Shares of Google fell 3 per cent after the results were released last night, which exceeded average forecasts but failed to live up to the heightened expectations of investors following Intel's strong earnings earlier this week. Net income hit $1.48 billion in the three months to June 30th, compared to $1.25 billion during the same period last year.
Google shares have risen 4 per cent since Intel's report on Tuesday.
“They did decently, but obviously it's not high enough for the Street,” said Laxmi Poruri, an analyst at Primary Global Research.
Google's revenue in the second quarter rose 3 per cent to $5.52 billion, compared with the average analyst forecast of $5.49 billion, according to Reuters Estimates.
Excluding traffic acquisition costs - the portion of revenue that is shared with Google partners - revenue was $4.07 billion.
“People were hoping they would see something around the $4.3 billion range,” said Brigantine Advisors analyst Colin Gillis. “Google is changing from a topline growth story to an earnings expansion story."
Google, the largest US Internet search engine, has weathered the global recession better than many of its rivals from Yahoo to Time Warner's AOL, which have suffered declining revenue in recent quarters.
In a conference call yesterday, Google executives said it was too early to tell when an economic recovery would emerge, but stressed their own business had begun to stabilize.
“A quarter ago we had no idea where the bottom was,” Google CEO Eric Schmidt said.
He noted business had picked up in the online shopping and travel categories that Google sells ads for. Sales chief Nikesh Arora said large advertisers have “come back to the table”.
The cost per click - the amount of money advertisers pay for a click on an ad - fell roughly 13 percent year-over-year, but rose 5 per cent from the previous quarter, Google said.
Headcount for the Mountain View, California company declined by 378 employees to 19,786 full-time staffers in the second quarter, part of which was due to the previously announced plan to lay off 200 sales and marketing workers.
Reuters