No matter what they say, Google still has the Midas touch. The fears of a meltdown at Google was overblown. Google tweaked its online advertising formula and accelerated its growth outside the United States to produce a first-quarter profit that surpassed analyst’s predictions, alleviating some of the economic worries battering its stock this year.
The Internet search behemoth said it earned $1.31 billion, or $4.12 per share, during the first quarter of 2008. That represented a 30 percent increase from net income of $1 billion, or $3.18 per share, in the first quarter of 2007. First-quarter revenue totaled $5.19 billion, up 42 percent from $3.66 billion a year ago. Investors had serious doubts about Google’s short-term prospects before yesterday.
“Our ongoing innovation in search, ads and [applications] helped drive healthy growth globally across our product lines, yielding another strong quarter for Google,” said CEO Eric Schmidt, in a statement. ” As we integrate DoubleClick into our advertising platform, we see exciting new ways to improve the user experience and increase value for our advertisers and partners.”
Google also reiterated on the call that its business wasn’t hampered by the economic slowdown. “It’s clear to us we’re well-positioned for 2008 and beyond” regardless of the economic situation, Schmidt said. “We’re well-positioned should economics change. We’ll continue to do well because our advertising is so targeted.”
Google’s global appeal propelled the Mountain View-based company as more than half its revenue came from outside the United States for the first time in its 9 1/2-year history.
The news, released after the stock market closed yesterday afternoon, lifted Google’s shares by more than $76 equivalent to 17 percent. Shares of Google were surging 18% to in after-hours trading to $528.50—their highest level since February. Google’s performance indicates the Internet’s advertising market—expected to generate $44 billion in worldwide spending—remains robust, especially outside the United States.
Yep, Wall Street analysts’ fears of a meltdown at Google was greatly exaggerated. The ubiquitous search company bounced back and struck like a wild cougar at Wall Street. You bet, Google still has the Midas touch. Steve Ballmer are you listening?