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Google’s Quarterly Growth Expressed in Triple
Digits
By Jim Hedger, StepForth News Editor, StepForth Placement Inc.,
February 1, 2005
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Google shares hit a record $210 in evening trading after the search
giant released a quarterly report that beat most analysts' expectations.
Google
considers itself the world’s largest generator of online advertising
revenue, a claim founded on its triple digit growth from Q3 to Q4.
In a highly anticipated investors conference call and web-cast, Google
reported significant quarterly growth with an income of $303 million on
just over $1 billion in revenues. This represents a 101% increase over the
same period in 2003. Google made an awful lot of money last quarter, capping
off the best year in the firm's history.
Almost all of Google's revenues come from paid-advertising and its distribution.
With literally millions of unique web properties displaying advertising
generated through Google's AdWords programs, and a major commitment to the
development of emerging international markets, CEO Eric Schmidt is confident
the growth will continue through 2005.
Trying to describe Google's business model at this point is much like explaining
the growth and future plans of an adolescent. Suffice it to say their continued
growth is based on continually producing great products and partnerships
that provide virtual real estate for AdWords advertising to appear on.
In order to accomplish this, Google spent much of its energies focusing
on two key aspects to their development, improving their business relationships
and improving the technologies that run their systems.
Co-founder Larry Page mentioned three initiatives to improve business relationships
Google has implemented over the past three months. The first is a focus
on fostering advertising among Fortune 1000 companies by providing a wide
variety of resources including specialized training in the development of
in-house AdWords marketing teams. Secondly, Google reorganized the way it
sells to businesses, creating a vertical sales team structure with sales
reps specializing in unique business sectors. Lastly, Page noted the Google
Advertising Professional program as a learning resource for advertisers
and third party marketers.
After Page outlined the three major internal changes at Google, his co-founder
Sergey Brin mentioned a series of content-partnership deals struck over
the past three months including: The India Times, Ask Jeeves Japan, Reuters,
AOL Europe, Virgin.net, Shopping.com, and Cnet. These new content-partners
all display advertising generated by Google. They join other media giants
such as the New York Times and millions of privately owned web sites.
Added to the increasing number of distribution partners, Google continues
to introduce new technologies and services, each of which generate advertising
space. In September, the Google-Library project was announced. In October,
Google acquired satellite-imaging firm Keyhole, released Google Desktop,
and announced it had doubled the size of its organic index to 8-billion
pages. Just last week, Google announced the beta version of Google Video.
Google's growth over the past three months sets a high bar for other firms
to follow but also firmly establishes search as the most serious sector
in mainstream advertising. The sector's credibility was reflected in the
share prices of Yahoo (up 1.7% after-close) and Ask Jeeves (up 4.8% after-close)
this evening as investors expressed their confidence in contextual advertising
distribution.
For detailed information, please see the Google Investor Release
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