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Online ad revenue drives Google profit up 17%

Google attributed surge in quarter earnings to revenue generated by paid clicks on its search ads. It posted a net of $2.3 bn in the January-March quarter against $1.96 bn last year.

twitter-logo PTI   New York     Last Updated: April 15, 2011  | 14:01 IST

Buoyed by a rise in its online advertising revenue, Google Inc has registered 17 per cent growth in net profit to $2.3 billion in the January-March quarter of 2011.

In the year-ago period, the company had a net profit of $1.96 billion, Google said in a statement.

Google's revenue rose 27 per cent to $8.58 billion in the first quarter ended March 31, from $6.77 billion in the year-ago period.

The company has attributed surge in quarter earnings to revenue generated by paid clicks on its search ads, which include clicks related to ads served on Google's sites and the sites of its partners.

"We had a great quarter with 27 per cent year-over-year revenue growth," Google CFO Patrick Pichette said.

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"These results demonstrate the value of search and search ads to our users and customers, as well as the extraordinary potential of areas like display and mobile. It is clear that our past investments have been crucial to our success today, which is why we continue to invest for the long term," Pichette added.

Google-owned sites generated revenues of $5.88 billion in the first quarter of 2011. This represents a 32 per cent increase over first quarter 2010 revenues of $4.44 billion.

However, higher marketing expenses along with the increased labour costs pushed Google's operating expenses by 54 per cent, reducing its operating margin by four points to 33 per cent.

According to the search engine, it hired more than 1,900 people in the first quarter, taking the total to 26,316 employees worldwide. The hiring was as part of a plan to add 6,000 employees this year.

The company said aggregate paid clicks, which include clicks related to ads served on its sites and the sites of its partners, climbed 18 per cent over the first quarter of 2010.

In addition, Google's partner sites posted revenues, through AdSense programs, of $2.43 billion, or 28 per cent of total revenues, in the first quarter of 2011. This indicates a 19 per cent rise from first quarter 2010 network revenues of $2.04 billion.

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