Google earnings rock in 3rd quarter

The search giant's quarter was really about its owned and operated sites, which accounted for 69 percent of revenue for the period.

Google handily topped expectations with its third-quarter results and allayed concerns about the economy's effect on search advertising.

Google revenues by geography, Q3 2011
Screenshot by Larry Dignan/ZDNet

Google reported third-quarter earnings of $2.73 billion, or $8.33 a share, on revenue of $7.51 billion, excluding traffic acquisition costs. Non-GAAP earnings were $9.72 a share in the third quarter.

Wall Street was looking for earnings of $8.74 a share on revenue of $7.22 billion.

The search giant's quarter was really about its owned and operated sites, which accounted for 69 percent of revenue in the third quarter.

Going into Google earnings, analysts were primarily concerned about the Motorola Mobility deal, the economy and Facebook's traction. Google has put off those concerns with its earnings report--for now.

Larry Page, CEO of Google, called the quarter "great" and talked up Google+, which now has 40 million users.

Google quarterly revenues, Q3 2011
Screenshot by Larry Dignan/ZDNet

Among the key numbers to note:

• Operating income in the third quarter was $3.06 billion, up from $2.55 billion in the same quarter a year ago.

• Google's network revenue--AdSense--was $2.6 billion, up 18 percent from a year ago. Google's revenue breakdown includes traffic acquisition costs.

• International revenue was $5.3 billion, or 55 percent of the total revenue pie. In the international unit, United Kingdom revenue was 11 percent of sales.

• Cost per click increased 5 percent in the third quarter from a year ago, but fell 5 percent sequentially. Paid clicks were up 28 percent in the third quarter compared to a year ago.

• Other cost of revenue--data centers, content acquisition and credit card processing among other items--was $1.17 billion in the third quarter, up from $747 million a year ago.

• Google ended the quarter with 31,353 employees, up from 28,768 three months earlier.

This story originally appeared at ZDNet's Between the Lines as "Google's third quarter results shine, Google+ hits 40 million users."

 

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