Google Doubles Third Quarter Profits Over 2005

On Friday October 20 leading search engine Google reported third quarter profits double those seen a year ago. Google shares surged 2.5 percent in after-hours trading on the heels of the announcement with shares closing during regular hours up 2.6 percent to $426.66.

The good news for Google is even more significant in a financial sense when compared to the faltering performance of the company's major rival Yahoo that has seen declining revenues for both its display and search-based advertising offerings. Yahoo posted its slowest third-quarter sales growth in four years on October 17.

During the quarter Google spent $313 million on research and investment and put an additional $492 into computers and networking systems while hiring even more ad sales staff and engineers. The company picked up an additional 1,400 employees during the quarter.

Google Chief Executive Eric E. Schmidt said, "In our model, the capital investments we are making give us differentially better service quality, better scale and better leverage. And we intend to continue this."

Google's net income was $733.4 million or $2.36 a share compared to $1.32 a share or $381.2 million a year ago. Revenue climbed to $2.69 billion, an increase of seventy percent.

Last week Google announced its plans to acquire the video-sharing site YouTube for $1.65 billion. Although the company's plans for YouTube are unclear, Google now markets video ads in some thirty countries.

Google co-founder Sergey Brin said, "We will use our targeting technology not only to find the right advertisement for each person, but to find the right medium for each advertiser."