BBC Home
Explore the BBC
BBC News
Launch consoleBBC NEWS CHANNEL
Last Updated: Tuesday, 1 February, 2005, 22:37 GMT
Advertising revenue boosts Google
Google logo
Google has thanked strong advertising revenues over the Christmas period for a seven-fold rise in quarterly profits.

The world's most popular internet search engine achieved net profits of $204.1m (108m) in the three months to 31 December.

Way ahead of market expectations, this compares to the $27.3m profits the company made a year earlier.

Total fourth quarter turnover jumped to $1.03bn from $512.2m, again beating analysts' estimates.

Shares rise

Google's shares rose in post-closing bell trading on Wall Street, up from their Nasdaq close of $191.90 to $201.60.

People were looking for Google to beat, and they did beat
Market strategist Marc Pado

Its market value - on the closing price - is now more than the combined total of General Motors and Ford.

When Google first floated back in August, its shares debuted at $85.

"Revenue is well ahead of anybody's expectations," said Barry Randall, portfolio manager at First American Technology Fund.

Simple system

Founded in California just six and a half years ago, Google has firmly established itself as the market-leading internet search engine.

Google - 34.7%
Yahoo! - 31.9%
MSN - 16.3%
Time Warner - 9.4%
Others - 7.7%
Source: comScore

Building on a very easy to use and efficient search facility, a wide range of businesses now bid for the right to have their text-based advertisements displayed alongside Google's search results.

For the whole of 2004, Google earned profits of $399.1m from a turnover of $3.19bn.

In 2003, the company earned $105.6m, or 41 cents per share, on revenue of $1.47bn.

"There was a lot of talk that Google was going to post a strong quarter," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co.

"People were looking for them to beat, and they did beat."

Playing catch-up

In the US Google currently has a 34.7% share of the internet search engine usage, according to research by comScore Networks.

It is followed by Yahoo! with 31.9% and Microsoft's MSN on 16.4%.

Microsoft is working hard to increase its share and catch up with Google.

Hours before Google's quarterly results, Microsoft unveiled the finished version of its new home-grown MSN search engine.

The revamped engine indexes more pages than before, can give direct answers to factual questions, and features tools to help people create detailed queries.

Google creators in share sell-off
21 Nov 04 |  Business
Google warns sales growth to slow
18 Nov 04 |  Business
Google shares fall as staff sell
16 Nov 04 |  Business
Google earnings surge on ad sales
22 Oct 04 |  Business
Rumours surround Google browser
23 Sep 04 |  Technology

The BBC is not responsible for the content of external internet sites


News Front Page | World | UK | England | Northern Ireland | Scotland | Wales | Politics
Business | Entertainment | Science/Nature | Technology | Health | Education
Have Your Say | Magazine | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific