SAN FRANCISCO (AP) - Mounting worries about another global recession haven’t shaken Google.
The online search and advertising leader’s third-quarter earnings, released Thursday, are the latest reminder of how Google’s position as the Internet’s dominant gateway has spawned a business that endures economic turbulence better than most companies.
Investors quickly chimed in with their approval as Google’s stock price surged more than 6 percent. The stock climbed $35.94 to $594.93 in extended trading after the release of results.
The third-quarter numbers painted a picture of a company operating in a bubble of prosperity amid a sputtering economy.
Even as a stubbornly high unemployment rate vexes the U.S., Google added nearly 2,600 more workers to its payroll to guarantee that 2011 will be the biggest hiring year in the company’s 13-year history. Google ended September with more than 31,500 workers, an increase of 28 percent, or nearly 7,000 jobs, from the end of last year.
While the U.S. economy’s growth is shrinking, Google’s is accelerating. The company’s third-quarter revenue of $9.7 billion was 33 percent higher than the same time last year. It marked the fourth consecutive quarter that Google’s year-over-year revenue growth has climbed.
Google earned $2.7 billion, or $8.33 per share, in the three months ending in September. That was up 26 percent from nearly $2.2 billion, or $6.72 per share, a year earlier.
If not for expenses covering employee stock compensation, Google would have earned $9.72 per share. That figure easily beat the average estimate of $8.77 per share among analysts surveyed by FactSet.
Google is doing well because of the reach of its search engine and the effectiveness of its ads. Google processes about two out of three searches in the U.S. and an even higher percentage in Europe and other parts of the world. Those searches provide Google with the traffic and marketing insights prized by advertisers.
Internet ads also are generally less expensive than print and broadcasting campaigns, making online promotions less susceptible to corporate cutbacks during tough times.
But not all online ad sellers do as good a job as Google. Yahoo Inc. and AOL Corp., a pair of Internet pioneers that started before Google, have been struggling mightily _ something that isn’t expected to change when those companies report their third-quarter results. Yahoo’s numbers are out next month while AOL will release its results Nov. 2.
Google is also helped by its expansion into mobile phones with its popular Android software. The company’s mobile revenue is now running at about $625 million per quarter, Page said Thursday. He sounded confident that mobile will become an even bigger moneymaker with next week’s scheduled release of updated Nexus phone from Samsung and Google’s proposed $12.5 billion acquisition of cell phone maker Motorola Mobility Inc.
Page is also bullish on Google’s 3 1/2-month-old Plus service, a social networking alternative to Facebook’s online hangout. With 800 million users, Facebook is widely seen the biggest threat to Google. Plus has more than 40 million users, Page said.