Page last updated at 21:19 GMT, Thursday, 16 October 2008 22:19 UK

Google shrugs off slowing economy

Google logo, AFP
Google's earnings so far seem recession-proof

The online search engine Google defied economic worries, with a 26% rise in profits, sending its shares soaring 7% in after-hours trading.

Google earned $1.35bn (778m) in the third quarter of 2008, easily beating analysts' expectations.

The firm said its earnings had grown strongly thanks to its core online search and advertising businesses.

Google's quarterly revenue, including commissions to affiliated advertisers, rose 31% to $5.54bn.

Announcing its results, which came after Wall Street had closed, Google said it would continue to improve its core businesses, and would also invest in future areas of growth.

While we are realistic about the poor state of the global economy, we will continue to manage Google for the long-term
Eric Schmidt, Google chief executive

Analysts welcomed the figures. Colin Gillis of Canaccord Adams said: "It's the power of the model - paid search is the best form of media advertising out there."

Cheaper technology

"Even in a down market, advertisers are going to be seeking customers. These results separate out Google from the eBays and the Yahoos," he added.

Greg Woodard of Manning & Napier in New York, said that Google would remain a dominant player.

"While it won't be immune from the economic downturn, at the same time Yahoo, its biggest competitor, is struggling. I think they'll emerge strong," he said.

Chief executive Eric Schmidt accepted that even Google, which is the internet's most profitable company, might not be immune to the fallout from the financial crisis.

"While we are realistic about the poor state of the global economy, we will continue to manage Google for the long term."

Google managers have said the search engine will thrive despite the slowing economy, because its technology can find customers more cheaply than marketing.


SEE ALSO
Google's Android mobile unveiled
23 Sep 08 |  Technology
Google takes on Apple in mobile
23 Sep 08 |  Technology
Google grilled on web privacy
03 Sep 08 |  Technology
Google accused on privacy views
01 Aug 08 |  Technology

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