Google profit climbs with online ad revenue

Google (NasdaqGS: GOOG - news) said Thursday its profit climbed to $3.35 billion in the first three months of the year as revenue thrived despite a trend toward cheaper ads on smartphones and tablets.

"We had a very strong start to 2013, with $14.0 billion in revenue, up 31 percent year-on-year," said Google chief executive Larry Page.

Google shares that ended the official Nasdaq trading day slightly down regained ground in after-hours trades to $777 with a profit figure that topped Wall Street expectations.

The number of paid clicks on ads posted at Google pages was 20 percent greater than those seen in the first quarter last year and up three percent from the final quarter of 2012.

Meanwhile, in a closely watched figure, the cost per click for advertisers dropped four percent, indicating a trend toward less expensive mobile ads.

Google executives lauded the earnings in a conference call with financial analysts but spent ample time highlighting "big bets" ranging from Android mobile gadget software to self-driving cars and Internet-linked glasses.

"Over the last two years we have worked hard to increase our velocity and improve our execution on the big bets that will change the world," Page said.

"Companies can tend to get comfortable doing what they've always done with a few minor tweaks," he added.

"But incremental improvement is guaranteed to be obsolete over time. That is why we are investing in what appear to be speculative products today such as self-driving cars."

Google this week began shipping Internet-synched eyewear to software developers who signed on to experiment with them at a cost of $1,500 a pair.

Terms of use on Google Glass included being forbidden from lending, selling or giving the eyewear to anyone else.

Powerhouse Silicon Valley venture capital firms last week joined Google to launch a syndicate to back entrepreneurs building products for the Internet glasses, which were expected to hit the consumer market by year's end.

Glass wearers can speak commands to the eyewear, and built-in camera technology captures first-person perspectives.

In another technology bet, Google has its sights set on Provo, Utah to become the third US city to get a Google Fiber network that moves Internet data at a gigabyte-per-second, about a thousand times faster than typical service.

"It is really about pushing for speed and writing the next chapter of the Internet," said Google chief financial officer Patrick Pichette.

Blazingly fast Internet connections could increase the money-making potential of data-rich services such as YouTube and Google TV.

Google Glass, which is powered by Android software, could potentially enhance the Internet giant's money-making services, such as maps.

"The best people want to work on the biggest bets and there is not much competition because no one else is crazy enough to try," Page said, noting that the company also cares about revenue and profit along the way.

"I get chills when I use a product that is the future, and that product is Glass," Page said.

Google's ad strategy is to improve the ability to get messages to people at the right times and places across an array of Internet-linked devices, including watches, glasses and other forms not yet invented.

"It is not about tablet, smartphone or desktop," Pichette said. "The real question is, are we growing the pie of your day with Google, helping you through the day on all your devices."