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"We had an excellent quarter. We continued to innovate, we continued to execute and we stayed focused on our users," said Eric Schmidt, Google chief executive officer. "Google had another solid performance."
With the emphasis given on Adsense, I was expecting the proportion of revenue from non-Google owned sites to increase. But that has not been the case. Since there has not been a dramatic raise in number of queries, more revenue must have come from increased bid prices or more keywords having ads rather than getting Adsense on to more websites.
Also the proportion of payout to non-Google owned sites has reduced from 80% Q2 2004 to 78.4% Q2 2005.
Also they added more than 700 people in the last quarter. No wonder we see a number of changes all over Google.
I feel they will. While they have been talking about 1¢ bids the real key here is that those of us who have had trouble keeping our ads in high volume general keywords will now be given a price to get them in.
This should dramatically increase earnings (and be good for AdSense publishers) in the wake of continued rumours about Yahoo's new small website advertising plan.
The second and third quarters are seasonally weaker for most Internet companies, since the weather is warmer and people tend to spend more time outside and on vacation rather than indoors and online.
That is particularly true in Europe, a key international growth driver for Google, which got 39 percent of its second-quarter revenue from overseas.
"We're more and more exposed," to seasonality, Schmidt said. "Now the effect of it is so much more visible in our revenue and profitability."