Google profits jump in third quarter

2011-10-14 08:29

San Francisco - Google on Thursday reported a big jump in profits in the three months to September as its budding online social network blossomed and Android smartphones gained traction.

Net income rose to $2.73bn on the wings of online advertising revenue that soared to $9.72bn in the third quarter, which ended September 30.

"The word that springs to mind is 'gangbusters'," Google co-founder and chief executive Larry Page said at the start of an earnings conference call with press and analysts.

"Ever since I've taken over as CEO, I've focused much of my energy on increasing Google's velocity and execution," he continued. "The team is really cranking."

Revenue was up 33% compared to the same quarter last year, with the bulk of the money being raked in at California-based Internet powerhouse's online properties.

Google's stock price jumped more than 6% to $594.53 a share in after-hours trading, following the release of the earnings report.

Page said Google's online social networking challenge to Facebook was growing fast and has topped 40 million users. Facebook boasts 800 million users.

"People are flocking to Google+ at an incredible rate and we are just getting started," he said, adding that billions of digital photos had already been shared at Google+.

Social features highlighted at Google+ will be "baked in" to the internet star's other online offerings, according to the chief executive.

"Last quarter we shipped 'plus' and now we are going to ship the Google part," Page said of weaving social and sharing features throughout the firm's platform.

"We are still at the very early stages of what technology can deliver," he continued. "These tools we use online will look very different in five years time and we are building these tools into Google-plus."

The Internet giant on September 20 opened to the public as it ramped up its challenge to leading social network Facebook.

The move came with an array of improvements Google to the social network it launched in an invitation-only test format on June 28.

Enhancements to Google+ included letting members take part in video-chat "Hangouts" using camera-enabled smartphones or tablet computers, or broadcast video presentations to groups of watchers using "Hangouts On Air."

Famous figures who have taken part in Google+ hangouts in past weeks include the Tibetan spiritual leader, the Dalai Lama, and Desmond Tutu, the retired archbishop of Cape Town, who is also a renowned human rights activist.

Use of Chrome is "through the roof," with more than 200 million people using the Google-made software for browsing the Internet, according to Page.

He added that the spread of Android was "mind boggling" with more than 190 million smartphones or tablet computers around the world being powered by the Google-backed operating system for mobile devices.

"You won't believe what we managed to get done in Ice Cream Sandwich," Page said, referring to the latest version of Android to make its formal debut next week in Hong Kong at an event being held by consumer electronics titan Samsung.

Google reported that it was on track to bring in $2.5bn in revenue a year from mobile offerings.

Page brushed aside inquiries about legal attacks on Android devices by rivals Microsoft and Apple, saying that Google would staunchly defend itself against intellectual property claims.

"We are serious about protecting the Android ecosystem," Page said.

"While there are lots of people trying to attack it, we see no signs that it is effective and think it will alienate their customers and relationships with other companies," he continued.

Google has been eliminating 20 products in recent months as part of a mission to streamline its offerings and better focus resources.

Google ended the quarter with $42.5bn in its coffers and 31 353 employees.

"We are at the edge of what is manageable in terms of head count growth," Page said of the company's unabated hiring spree.

"Our goal is to hire the best people at every level and keep them at Google," he explained.