- Associated Press - Thursday, October 13, 2011

SAN FRANCISCO (AP) - Mounting worries over 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 Inc. has used its position as the Internet’s dominant gateway to build a business that endures economic turbulence better than most companies.

Investors quickly showed their approval as Google’s stock price surged 6 percent. The stock climbed $33.37 to $592.36 in extended trading after the release of results.

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.

Revenue climbed 33 percent from last year to $9.7 billion.

After subtracting the commissions that Google pays its advertising partners, Google’s revenue stood at $7.5 billion _ about $200 million above analyst projections.

Analysts had been bracing for a slight slowdown in Google’s growth, assuming the economic turmoil that roiled the stock market during the summer would have some fallout as advertisers grew more cautious and tightened their ad budgets.

Instead, Google’s year-over-year revenue growth in the latest quarter was better than the 32 percent increase posted for the April-June stretch. It marked the fourth straight quarter of year—over-year revenue growth for the company.

The performance should also bolster Wall Street’s faith in Google CEO Larry Page, who initially got a cool reception from investors when he replaced Eric Schmidt six months ago. Google has now blown past analyst forecasts in both quarters with Page calling the shots.

“When I look back at the last quarter, the word that springs to mind is, `Gangbusters,’ Page crowed during a Thursday conference call with analysts.

Google would have made even more money, if not for Page’s determination to invest heavily in projects, people and computers that he believes the company needs to become even more powerful

The company added nearly 2,600 workers in the third quarter to end September with more than 31,500 employees. Google has hired nearly 7,000 employees since the end of last year, guaranteeing 2011 will mark the biggest payroll expansion in the company’s 13-year history.

The hiring spree has pushed Google to “the edge of what is manageable,” Page said in Thursday’s conference call.

Excluding employee stock compensation, Google’s operating expenses rose by nearly 40 percent to $6.1 billion.

Page has offset some of the higher spending by jettisoning Google services that haven’t been paying off. He told investors he has dumped about 20 products so far, so Google employees can focus more on more promising areas like Plus, the company’s social networking alternative to Facebook. Since its debut in late June, Plus has attracted more than 40 million users, Page said Thursday. Facebook, started in 2004, has about 800 million users.

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