14 DAY TRIAL // Google has revealed its financial results for the second quarter and, despite seeing growth from the previous period and year-over-year, analysts were disappointed by the lower than estimated revenue and profits. Google reported $6.82 billion in revenue for Q2 2010, a small 1 percent increase over Q1. Income was slightly lower than what analysts predicted.
“Google had a strong second quarter,” Eric Schmidt, Google CEO, said. “Solid growth in our core business and very strong growth in our emerging businesses drove 24% revenue growth year over year. We saw strength in every major product area, as more and more traditional brand advertisers embraced search advertising and as large advertisers increasingly ran integrated campaigns across search, display, and mobile. We feel confident about our future, and plan to continue to invest aggressively in our core areas of strategic focus.”
Revenue rose 24 percent from the previous year, but 2009 was a particularly bad year for Google like for the rest of the industry. Traffic acquisition costs, what it pays the websites using its ad network, were at $1.73 billion, 26 percent of all ad revenues, Google says.
Non-GAAP net income was at $2.08 billion in the second quarter, up from $1.71 billion in Q2 2009. Non-GAAP earnings per share were at $6.45, 10 cents lower than most predictions. Ad revenue from its own sites made up 66 percent of the total sum, or $4.50 billion. AdSense brought in another $2.06 billion, 30 percent of Q2 revenue.
One reason for the modest performance was the increase in spending. Google is focusing on investing in long-term businesses hoping to create new revenue streams, other than advertising. The company added nearly 1,200 employees in the second quarter, its biggest rise in the past two years. It is now at 21,805 employees. Still, the company was able to add $3.6 billion to its cash reserves which now stand at $30.1 billion.