Analysts and skeptics are once again floored by Google’s announcement of its earnings in the third-quarter. This was an anticlimax for all those who thought that Google finally will show effects of the slump in the economy.
This positive result is due to effective cost control by Google in the previous quarters. According to the report published Google posted a profit of 1.35 billion which is a 26% rise and a sale of $5.54 billion, an increase of 31%. These figures greatly exceeded predictions by analysts.
This announcement was a great relief for the investors and stock price went up further by 10%. Executives from Google went on a conference call with analysts with an oft seen confidence. According to Eric Schmidt, Google’s CEO, in spite of the severe slump in economy, Google was confident about its future.
Remarks from Schmidt are backed by excellent numbers. Search related ads where Google makes maximum profit are popular with advertisers due to the fact that they always reach customers who are ripe and ready to buy. According to Hal Varian, chief economist from Google, customers are ready to pay any price for their clicks.
There was a surprise factor in this announcement for the analysts as Google had cut down on its expense growth by hiring only 519 people this quarter as compared to last year’s 2130. Buoyed profits are due to Google’s efficient cost control in various sectors including its capital spending. In spite of the weakening of the dollar Google and at least 51% of its sale being overseas, Google has been able to sustain and show profit much to the relief of investors.
