Google defies economy to beat forecasts; shares rise
Google Inc profits surpassed Wall Street quarterly forecasts, sending its shares up more than 10 percent as the Internet search and advertising leader held deepening economic gloom at bay, reports Reuters.
Web traffic and revenue growth were strong in all major parts of the world and searches were up for almost every industry using Google, Chief Executive Eric Schmidt said.
But with uncertainty widespread among global business leaders, government officials and media commentators over where the economy is headed, Google is unsure what impact this could have on its advertising dependent business, the CEO said.
"We are all in uncharted territory," Schmidt said of the economy, adding that Google has taken expense control more seriously recently. "We are very realistic about the macro environment, but we are optimistic about Google's future."
Wall Street analysts were pleased by efforts to rein in expenses. Many have complained for years at how Google was "spending like drunken sailors" to hire new employees and install computer data center capacity as its growth exploded.
Google added just over 500 employees in the quarter, about half of them engineers, taking total staff to about 20,000, and the company said it would continue to hire, but cautiously.
Relieved investors said Google appeared to be alone in its ability to weather the economic storm.
"Even in a down market, advertisers are going to be seeking customers. These results separate out Google from the eBays (EBAY.O: Quote, Profile, Research, Stock Buzz) and the Yahoos (YHOO.O: Quote, Profile, Research, Stock Buzz)," said Colin Gillis, an analyst at Canaccord Adams. Ahead of the report, he had prayed aloud that Google results might shore up investor confidence.