IP Democracy: Google's Still Going Gangbusters

Those little search and contextual ads that Google sells continue to reap enormous benefits for a company that has, lately, provoked controversy, competitor enmity and copyright holder scorn. Google issued its Q1 07 earnings report this afternoon and the results are, as usual, superb.

Revenues rose 63% year-over-year to $3.7 billion while profits soared 69% to $1.0 billion.”We are ecstatic about our financial results this past quarter,” CEO Eric Schmidt said during the earnings call. “Our core business remains very strong.”

That’s about the size of it. Google sells ads and sells them very well. It helps that the company has introduced new image and video ads, but basically the finely tuned text-based search and contextual advertising engines keep Google in the money.

And from what I could see, there’s no sign of trouble on the horizon either. No aspect of Google’s business is slowing down unexpectedly and the search giant’s mound of cash-on-hand just keeps getting bigger. Google had nearly $12 billion in cash at the end of the quarter, compared to only $8.4 billion at the end of Q1 07.

In essence, then, the $3.1 billion in cash that Google is paying for DoubleClick still leaves Google with more cash on hand than it had a year ago. And Google clearly thinks that DoubleClick will boost its already hefty bottom-line even higher. “I think we realized how much of an efficiency there really was in online advertising,” co-founder Sergey Brin said during the earnings call.

One other interesting tidbit from the call: Schmidt said that press reports of Google’s content protection “tool” for YouTube were distorted. The “claim your content” option that Google is building won’t scan uploaded videos to find unauthorized content, as some press reports suggest. Instead, it will offer a more efficient way for rights holders to engage with the take-down process.

“It allows content owners to somewhat automate the take-down process,” Schmidt said. Despite this obvious attempt to ratchet down the expectations generated by the press reports, Schmidt said that the “claim your content” tool would “go a long way” to satisfying rights holders.

Selected Google Financial Data ($ in 000s)
	1Q06	2Q06	3Q06	4Q06	1Q07
REVENUES	$  2,253,755	$ 2,455,911	$ 2,689,673	$ 3,205,498	$3,663,971
COSTS AND EXPENSES	$  1,511,056	$ 1,640,619	$ 1,758,342	$ 2,144,904	$2,442,762
INCOME FROM OPERATIONS	$     742,699	$    815,732	$    931,331	$ 1,060,594	$1,221,209
NET INCOME	$     592,291	$    721,077	$    733,361	$ 1,030,716	$1,002,162

Posted by Cynthia Brumfield on April 19, 2007 8:27 PM to IP Democracy