14 DAY TRIAL // Google has been quite cheery about its financial wellbeing during the economic downturn with the top dogs at the company being rather optimistic about its recovery. The search giant has been faring better than most but it has been hit by the bad times just like anyone else. The company is expected to release its financial results for the third quarter on the 15th and most annalists now believe Google will beat expectations for the quarter.
The latest estimates now show a revenue of $5.44 per share compared to the consensus of $5.36 per share for the third quarter of 2009. According to Bernstein Research estimates Google will bring in $4.35 billion in net revenue in Q3 versus the consensus of $4.21 billion. "We expect Google's results to show some signs of cyclical improvement in Q3, as easier comparisons and more favorable currencies should benefit topline trends," Bernstein analyst Jeffrey Lindsay wrote in a research note, according to eWeek. "Paid search is an early cycle advertising format given the immediacy of keyword auctions, and Google has maintained its dominant position within the category."
Key to this pickup in revenue is the slight increase in advertising spending as the market is slowly starting to move again. Online ad sales have leveled off for about a year now, after years of sustained growth. While the ad market as a whole hasn't exactly recovered yet, there is a slight pickup and most importantly for Google there is a clear shift towards search advertising with money moving away from other forms of online marketing.
Google makes some 97 percent of its revenue from advertising and a large portion of that comes from search ads. The company's CEO has been optimistic about the economic recovery having recently revealed a revival of ad sales in the US but also in Europe and Google has been spending more and hiring at its usual levels once again.