Google executives were rightly buoyant on the release of the Q3 results (to September 30 2010) but watchers were more relieved because of what the results said about the search advertising market – that it hadn’t fallen into a dive
Revenue rose 33% compared to the year ago quarter, to $9.72bn while net income expanded from $2.17bn to $2.73bn. Google-owned sites generated revenue of $6.7bn (69% of total revenues) and 39% up on the year quarter. Network revenues from partner sites via the AdSense programme rose 18% to $2.6bn (27% of total revenues).
International revenues (ie outside the US) were $5.3bn or 55% of total revenues, which was 41% up on last year. Within that UK revenue was up 25% to $1bn. What that really says is that at the moment Google - search advertising - is holding out against a depressing economic backdrop. Among the positive statements there were indications that Europe was softening though, but that is hardly surprising.
Changes in the background situation make it all the more important for Google to broaden its revenue options and get it costs under control (see Google wows with Q2 results). It is closing out around 20 of its products to release investment resources, much of which we think will go into its mobile activities, along with Google+ (40m users and counting) and the transformation of the Google environment and experience. “Our ultimate ambition is to transform the overall Google experience, making it beautifully simple,” extolled CEO Larry Page.
Mobile certainly seems to be growing - the mobile revenue run rate is now around $2.5 billion and there are over 190m Android devices in use. The nicely named Ice Cream Sandwich, the next version of Android, is due soon. Compared to Google’s total revenue, mobile contribution is tiny but its presence and growth rate are significant because mobile search represents a new market.
Google is doing well for sure but maintaining momentum, finding new revenue streams and bidding to be “the” place to go on the web costs, particularly when the battle in against Facebook, and Apple.