Google reported it's biggest quarterly profit ever, a 27 percent bump in the third quarter that prompted CEO Eric Schmidt to tell analysts "We believe the worst of the recession is behind us." For the quarter, the company said net income was $1.64 billion.
Google's revenues were $5.94 billion for the quarter, up 7 percent from the like quarter in 2008. Its record net income for the quarter that ended Sept. 30 was $1.64 billion, or $5.13 a share, up from $1.29 billion, or $4.06 a share in the third quarter of last year.
Google said net cash from operations in the third quarter of 2009 was $2.73 billion, compared with $2.18 billion in the third quarter of last year.
YouTube is ‘on the path to profitability'
One of the stars of Google's conference call with analysts was YouTube, which Google last year spent $1.65 billion to acquire. Schmidt said display advertising, "particularly including YouTube," performed well this quarter, and the video-sharing site is "now on a trajectory that we're very pleased with... we actually see a very profitable and good business for us." He said YouTube was uploading more than 15 hours of video every minute, most of it non-professional content the company won't focus on to monetize.
SVP for product management Jonathan Rosenberg said, "YouTube monetized views have more than tripled in the past year, and partner videos were being actively promoted on various sections of the site.
The site is becoming more popular with mainstream advertisers, said Nikesh Arora, president of global sales. He said 90 percent of the top AdAge advertisers have bought space on YouTube. Pre-roll ads increasingly are showing up on the site, Arora said, as users begin to accept the advertising as a tradeoff for watching premium content free. He added YouTube will see increasing amounts of long-form video on the site, like the content it'll be uploading as part of its recent deal with U.K. broadcaster Channel 4; that content, he said, will be a key profit engine.
"We have been pretty much been able to sell homepage ads across the world, 90 percent of U.S. homepage ads were sold out in the quarter," Arora said. "We finally got all the pieces in place."
Said CFO Patrick Pichette: "We are really pleased about YouTube's performance (it's) on its path to profitability in the not-too-distant future. We are monetizing more than a billion video views every week on YouTube."
Schmidt also reinterated that Google was on the prowl for acqusitions, even larger ones, although he said they would be unlikely to be in the scale of its YouTube buy.
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