Posted by: Rob Hof on October 18, 2007
Like Yahoo! and eBay did earlier this week, Google reported third-quarter earnings that outstripped expectations. Google said profit rose 46%, to $1.07 billion, or $3.91 a share, on a 57% rise in sales, to $4.23 billion, or $3.01 billion minus traffic acquisition costs. Analysts had expected $3.78 a share. Google’s stock was up about 1% soon after the report in after-hours trading, even though it has already risen by about $100 in the past month.
CEO Eric Schmidt said the search quality investments Google has been making have paid off, especially overseas. That has driven more click-throughs on ads, which means more revenue for Google.
That said, Google continued to hire a heckuva lot of people—2,130 in the third quarter alone, for a total of 15,916. (I don’t believe it either….) It’s early on the conference call, but perhaps that was a factor in the profits growing more slowly than sales.
I’m sorry to be missing a lot on the conference call because, well, I’m at a conference, and a noisy one, but one question caught my ear. An analyst asked if Google felt obligated to buy Facebook or another social network. Schmidt wouldn’t say directly, but added: “I want to assure you that the cash is not burning a hole in our pockets.”
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