Google sees record profit

February 24, 2011 - Digital State Marketing

Google has reported its highest quarterly profit, suggesting that the internet advertising market is bouncing back from the recession. Google reported net profit of $1.64bn (£1bn) between July and September, up 27% on the same period a year ago. The vast majority of this profit has come in through its’ pay-per-click (PPC) services. This does show that if a site can position itself well on the organic rankings using a search marketing company, then it is definitely worth it. Ethical search marketing is a good way to do this, through a white hat campaign which doesn’t involve any keyword stuffing or spamdexing etc.

“The worst of the recession is clearly behind us,” said Google chief executive Eric Schmidt. This may seem a very positive approach to take, but the Google CEO is very experienced and realises that some not all firms can be on the front page for specific search terms and so will pay for the advertising they provide. Ethical search marketing can be a success, but there will always be a limit to search marketing, something which Google can always take advantage of.

The company also delivered a more optimistic forecast for full year earnings. Management said they too were seeing some stabilisation in the overall economic environment which means that the search marketing industry is bound to pick up also. Revenue at Google for the three-month period came in at $4.38bn, which was well ahead of analysts’ expectations of $4.24bn. Pay-per-click and ad sense sites are receiving more hits than ever before as the world is getting online and Google can charge an even larger premium for its’ services.

“Because of what we have seen, we now have the confidence to be optimistic about our future,” said Mr Schmidt.

The company also announced two new initiatives, including the sales of electronic books through a new electronic editions service. This would be in direct competition with Amazon and Apple. A move away from the search marketing industry does seem strange, but with such healthy profits, it seems a logical step for Google to explore other industries. Google has also agreed a deal to broadcast programmes from the UK’s Channel 4 on its YouTube site.

The internet search engine has weathered the recession better than other advertising-dependent companies, and it was widely expected to be one of the first beneficiaries of an economic recovery. A prospective search marketing company will be pleased by this news, because it signals that firms have upped their search advertising budget and will be willing to spend more to be in the top ten for the organic search results.

“Google has no competition. Yahoo is withering on the vine and [Microsoft’s] Bing is too tiny now,” said Colin Gillis, senior analyst at Brigantine Advisors.

He said the message from the Google management was loud and clear: “Big brand advertisers are back and they are spending money.” Let the search marketing companies thrive on this!