SAN FRANCISCO: Google Inc. said Thursday its first quarter profit has risen 69 per cent with increased advertising sales worldwide.
The No 1 search company in the world said its net income for the three-month period ended 7 March 2007 rose to $1 billion, or $3.18 per share, from $592.3 million, or $1.95 per share, in the corresponding quarter of the previous year.
When costs for stock options are excluded, the profit rose $3.68 a share, which has beat the analysts' forecast of $3.30 per share.
The company's sales increased 62 per cent to $3.66 billion during the quarter. Excluding payments the company makes to its advertising partners, sales rose 66 per cent to $2.53 billion. Analysts had predicted sales of $2.49 billion.
It is plain clear the search company has left rivals Yahoo and Microsoft way behind as it expanded to markets abroad.
The gains helped the company to cover a 62 per cent increase in expenses, mostly on new projects. The increasing expenses had been a concern for analysts, who felt it may affect the company's long term growth. Most of the expenses had been on account of adding IT infrastructure to manage its new services like Checkout.
The company said its capital spending has risen 73 per cent during the quarter to $597 million. It had paid $1.65 billion to acquire the YouTube video- sharing site and the $3.1 billion for DoubleClick Inc.
The company said improvements it had made to its advertising software had helped increase sales. The new features included one that helps companies assess the quality of their ads.
Revenue from outside the U.S. rose to $1.71 billion, which now constituted 47 per cent of total sales, compared with 42 per cent a year earlier.
Chief Executive Eric Schmidt said the company's core business is very strong and it is the core business that is driving its success.
Google announced Schmidt has been designated chairman of the board, a new position for the company. He is already the chairman of its executive committee.
According to market research firm ComScore, Google's share of search queries in the U.S. rose to 48 per cent during the quarter from 42 per cent a year earlier. Yahoo's remained unchanged at 28 per cent and Microsoft's fell to 11 per cent from 13 per cent, the firm said.
Yahoo had posted an 11 per cent fall in its first quarter profit at $142 million, while its net sales increased 9 per cent to $1.18 billion.
Google's shares were up by $14.49 to $486.14 in extended trading.
