Google stock continues to impress

October 19, 2006
According to the wires, Google is reporting a 70 percent year-over-year increase in revenue of $2.69 billion in its third quarter 2006 fiscal results, which ended Sept. 30. The Internet search engine also announced a non-GAAP operating income of $1.03 billion, a net income of $812 million and earnings per share of $2.62. While these earnings are not reflective of Google's recent acquisition of YouTube, they do indicate Google's partnerships with eBay, Fox Interactive Media and Intuit. According to Reuters, they also posted a 92% jump in quarterly profit.

Didn't I read Yahoo's 3rd quarter earnings were down ~40%? Google and Yahoo! seem to be headed in opposite directions. Internet Outsider has some interesting thoughts on these two competitors.

This is both good and bad for the industry. It's good for the industry if Google continues to dominate Internet search because you can spend 85-90% of your advertising revenue with Google since the vast majority of people use Google to search. Any webmaster worth his/her salt knows this simply by looking at the webserver's referral logs. If the market is fragmented, then businesses have to spend advertising dollars in multiple places, and certainly won't get the same return on investment (ROI), resulting in higher marketing costs and lower profitability.

On the other hand, having Google dominate Internet search is bad, because then they can set the agenda, they can do what they want, and they can set the prices they want and how much of a "cut" they take on Google Adsense/Adwords search advertisements. The beauty of capitalism is when it's a free market with many companies competing. Look at AT&T in the telecom world before they were broken up. Once an industry becomes a monolithic -- as did the telecom sector up until the 1990s -- then the market stagnates, innovation ceases, and price/competiton becomes nill. Breaking up Ma Bell helped spark more innovation, more competition, and lower prices for consumers.

Similarly, Google's "do not evil" manta is all fine and dandy, but should we trust them to avoid the Dark Side? Why hasn't Google earned the ire that Microsoft has? Maybe it's because Google has enabled businesses, entrepreneurs, and even home-based businesses to make money off of Google. I guess we're willing to look the other way as long as we get our Google Adsense check in the mail.

Post a comment

See this page in TechnoratiTechnoratibook mark in del.icio.usDel.icio.usSlashdot.comSlashdotSubmit to Digg.comDigg

Tags: , , , , ,

Search Technorati: , , , , ,
Related Tags: , , , , ,

Listed below are links to sites that reference Google stock continues to impress:

Trackback Pings

TrackBack URL:
http://blog.tmcnet.com/mt3/t.fcgi/29753

Comments to Google stock continues to impress


(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)