Shares Rise As Google Profits Jump Over 60%

The world's dominant search engine has announced a 61% rise in first-quarter profits, as it continued to gain ground with large advertisers, particularly on its YouTube video site and for mobile ads.

 

Google reported net income of $2.89bn (£1.81bn) for the first three months of 2012, compared to $1.80bn (£1.13bn) in the same period a year ago.

Revenues at the Californian firm also rose 24% to $10.65bn (£6.6bn) over the period.

"Google had another great quarter," co-founder and chief executive Larry Page said. 

"We also saw tremendous momentum from the big bets we've made in products like Android, Chrome and YouTube.

"We are still at the very early stages of what technology can do to improve people's lives and we have enormous opportunities ahead. It is a very exciting time to be at Google."

The company's board of directors approved a stock split designed to ensure the control Dr Page and his co-founder Sergey Brin have over Google does not get diluted as the company issues new shares for employee compensation and acquisitions.

Essentially, the proposal creates a new set of 'class C' shares without voting rights, which will be swapped for investors' existing shares and listed separately on the Nasdaq exchange. 

The Google boss said maintaining the corporate structure that gives him and Mr Brin 56.7% of the voting control at Google was the best way to keep finding the big opportunities and  asked investors to trust in their long-term vision.

"By investing in Google, you are placing an unusual long-term bet on the team, especially Sergey and me, and on our innovative approach," he said.

Wall Street Journal technology editor Ben Rooney told Sky News that the move would allow Google to invest in long-term projects and which have the potential to deliver huge returns, without worrying about the short-term effects on its financial reports.

The announcements came as Dr Page completed a year after his return as chief executive.

Since taking the reins 12 months ago, he has cut back on extraneous projects, launched Google+, a social networking service to challenge Facebook, and signed a $12.5bn (£7.83bn) deal to acquire smartphone maker Motorola Mobility Inc.