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Google’s Q1 Earnings Break Records While Profits Dwindle

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Google’s Q1 Earnings Break Records While Profits Dwindle

The quarterly revenue reports – and the shareholder dividends that accompany them – are crucial for any company. For companies as big as Google, however, that quarterly report can give a strong image the company’s current strength in the market and foreshadow the actions of the company in upcoming months and years. Google first quarter (Q1) report in 2011 is very telling: Its earnings have broken all previous records, while its profits have declined.

The previous record set by Google was $8.44 billion, set in the fourth quarter of 2010. Having an increase in the first quarter is surprising, since the fourth quarter is generally expected to be the highest in revenue. Last year’s first quarter earnings reached $6.77 billion, a far cry from the 2011 figures. That means that 2011 should be a record year all-around for Google, and that the posted revenue of $8.58 billion will be little more than a temporary milestone.

The vast majority of the company revenue comes from Google-owned sites, which generated $5.88 billion is the first quarter. Networked sites, meanwhile, $2.43 billion. Only three percent of all revenue was generated outside these two major sources.

Additional details include:

  • Total paid clicks increased by about four percent from Q4 of 2010 and 18% from Q1 of 2010
  • 53% of all revenue came from outside of the United States in Q1.
  • Google’s “cash equivalents” in Q1 totaled $36.7 billion.

But Google shareholders aren’t all happy; they were unhappy enough, in fact, that the stock value for Google dipped by nearly five percent. The reason is Google’s profit of $2.3 billion, compared to $2.54 billion from Q1 of 2010. Lowered profits have been blamed on long-term investments, the company’s bulk hires, and expanded marketing efforts.

[via Search Engine Watch]

 

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Rob D Young

Rob has been insatiably obsessed with Google, search engine technology, and the trends of the web-based world since he began ... [Read full bio]

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