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Last Updated: Tuesday, 1 February, 2005, 22:37 GMT
Advertising revenue boosts Google
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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.

US SEARCH SHARE
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.





SEE ALSO:
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


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