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Google Finance, Govt, Policy and Business Issues Forum

Google Q3 Profit Nearly Doubles

 8:22 pm on Oct 19, 2006 (gmt 0)

Google Inc. (NASDAQ:GOOG) today announced financial results for the quarter ended September 30, 2006.

Google's third-quarter profit nearly doubled from a year ago as sales of keyword-related advertising continued to grow for the world's top Web search engine.

"Business is very, very good here at Google. We had an excellent quarter in all respects, especially in international," Google Chief Executive Eric Schmidt said in a conference call Thursday after the results were released. During the quarter, Google saw strong user growth and improvements in search quality and ad sales, Schmidt said.

The news sent Google's stock up shares rising nearly 8 percent to $459.51 in after-hours trade, after closing at $426.06. The earnings announcement was made right after the market closed.

Google Q3 Profit Nearly Doubles [news.zdnet.com]

"Our third quarter results are a testament to the strength of our network of advertisers and partners, as well as our continuing focus on users," said Eric Schmidt, CEO of Google. "We were particularly pleased with the contributions of our international business in a seasonally weaker quarter. In addition, we continued to forge significant partnerships with companies such as eBay, Fox Interactive Media, and Intuit that will be of great value to all involved."

[edited by: engine at 7:59 am (utc) on Oct. 20, 2006]



 9:49 pm on Oct 19, 2006 (gmt 0)

gee, I'm not surprised.

Just checked some adwords stats and our cost in september 2006 is about 7x higher than in 2005.

september 2005 clicks: 15k
september 2005 impressions: 79 million

september 2006 clicks: 20k
september 2006 impressions: 70 million

5k more clicks, 9 million less impressions, result? More than 7x more this year. Much higher cost per conversion.

I give Google, say another 2-3 years before completely milking their advertisers out of the market.


innocent victim

 8:07 am on Oct 20, 2006 (gmt 0)

But you only exist because of Google, no?


 8:15 am on Oct 20, 2006 (gmt 0)

Itīs good to be web publisher these days :-)


 8:23 am on Oct 20, 2006 (gmt 0)

Google's AdSense programs generated revenues of $1.04 billion, or 39% of total revenues, a 54% increase over network revenues of $675 million generated in 3Q 2005 and a 4% increase over 2Q 2006 revenues of $997 million.



 11:21 am on Oct 20, 2006 (gmt 0)

5k more clicks, 9 million less impressions, result? More than 7x more this year. Much higher cost per conversion.

But how was your revenue?


 12:43 pm on Oct 20, 2006 (gmt 0)

Perhaps the handwringing reports of PPC's demise are premature?

Hello new media and new media advertising.


 2:03 pm on Oct 20, 2006 (gmt 0)

It's no wonder ad sales went up since the serps were so off ALL of the third quarter. Deliberate?


 4:17 pm on Oct 20, 2006 (gmt 0)



 7:43 pm on Oct 20, 2006 (gmt 0)

Do no evil, baby. Congrats to the bulls. I didn't expect a disappointment, but I didn't have the guts to put down a bet on a positive surprise either. With all the effort G's put into price increases, the jump is no wonder.

As long as the PPC market doesn't have a decent alternative that offers some scale, G will continue to have its way. Sux for advertisers, but to the victor go the spoils.


 8:34 pm on Oct 20, 2006 (gmt 0)

I think all the guys crying about how much their Adwords campaigns cost should try some offline marketing.

You think the CPA (cost per acquisition) of a new customer is big online? Try some offline marketing, then we'll see who's crying. lmao!

You had a good thing with Adwords while it lasted; it was very, very cheap. Now, while I don't agree that Google should be jacking up prices for whatever reason they somehow magically come up with in their minds, I say, welcome to the real world of advertising. Customer acquisition can be expensive, just make sure you're offering enough 'back-end' products to make sure you get as much lifetime customer value (LCV) as possible.

Bottom line: did the cost to bring in a new customer (CPA) meet or exceed what they paid back to you as a customer? If they did, then Adwords worked for you, bottom line..

(And here's an innovative strategy for making up the increased cost in Adwords: Whenever GOOG increases Adwords prices, buy GOOG stock. Increased Adwords prices=increased stock price. Whatever extra money you had to pay in Adwords will be more than made up for from buying the increased GOOG stock. A few weeks ago I bought heavy GOOG and today I'm up 45.24%... Adwords going up? So is GOOG stock ;)

p.s. The preceding was not a suggestion to buy or sell stock, I'm not a broker, get competent advice and don't sue me when my 'innovative strategy' flops ;D


 12:20 pm on Oct 21, 2006 (gmt 0)

paperclick, i absolutely second your opinion.
i'm sick of people whining about adwords prices at any given time. if it's too expensive for you then go leave the program, simple as that. then try to negotiate deals directly with the publishers! what keeps you from doing so? i'd be glad to submit excellent offers to you without google as intermediate agent. or find another business opportunity? hmm.. adwords your only revenue stream? without adwords no business at all for you people? oh well..


 10:47 pm on Oct 21, 2006 (gmt 0)

I have nothing but sympathy for the way small and midsize publishers have been exploited, but it was inevitable when they sold out to the Evil Oligarchs on Wall Street.


 10:58 pm on Oct 21, 2006 (gmt 0)

Some of the AdWords advertisers are complaining about it in this thread:

Landing Page Quality Score Implementation Coincides with Huge Revenue and Profit Increases for Google


 5:07 am on Oct 22, 2006 (gmt 0)

Insofar as I am concerned, the last page is also significant. 99% of revenues still comes from advertising. What's funny is that we all talk about how we should never have all of our eggs in one basket. Google hasn't managed to diversify its income sources.

I wonder how much of a concern that is at the 'plex (if at all)!

Another interesting note is that the percentage of total advertising revenues from "Network Sites" slipped 5% (over YTD in '05 and '06). If that continues, it is logical to assume that less attention would be paid to those programs (even though the overall revenue generated by Network Sites increased).

Interesting stuff there indeed! Game on!

[edited by: Chico_Loco at 5:10 am (utc) on Oct. 22, 2006]


 7:11 am on Oct 22, 2006 (gmt 0)

Well, I think advertisers that are complaining about adwords price should focus more on content network, and less on Google search. Google has a limited number of impressions, and everibody is competing for them. Google is not stupid to give you their visitors cheap, when they can find somebody willing to pay more.

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