Page last updated at 14:39 GMT, Friday, 18 July 2008 15:39 UK

Google profits trigger concerns

Google logo
Google shares fell in after-hours trading

Google's profits rose by less than expected between April and June, raising concerns of a slowdown in the online advertising market.

The internet giant posted a 35% rise in second quarter net profit to $1.25bn (626m) - slightly below forecasts.

The company said its business had held up well despite a more challenging economic environment.

But investors, used to Google outperforming, sent shares tumbling 9.4% to $483.67

"There's the initial shock of this being the best company in the space and it just fell short, said Colin Gillis, analyst at Canaccord Adams.

'Challenging environment'

Google reported a 39% rise in revenue to $5.37bn in the three months to 30 June.

"Strong international growth as well as sustained traffic increases on Google's web properties propelled us to another strong quarter, despite a more challenging economic environment," said Eric Schmidt, Google's chief executive.

The company blamed its below-forecast performance on lower returns from investing its $12.7bn cash pile as a result of volatile interest rates.

The number of paid clicks on websites operated by Google and its partners fell 1% from the first quarter.

Stanford Group analyst Clayton Moran said it was evidence "there is a slowdown in internet advertising that's affecting Google".

Google employed another 448 people during the quarter - the fewest hired since the fourth quarter of 2004.




SEE ALSO
Yahoo-Google agree online ad deal
13 Jun 08 |  Business
Google mulls Microsoft response
19 May 08 |  Business
Google keen on greater Yahoo ties
09 May 08 |  Business
Google denies staff 'brain drain'
08 May 08 |  Technology
Google faces human rights votes
07 May 08 |  Business
Yahoo faces ire of shareholders
05 May 08 |  Business

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


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific