Google defies downturn with surge in profits

Google has reported a 26% profit surge to $1.35bn (£778m) to beat analyst forecasts, despite the global financial crisis and downturn in the advertising market. The internet giant reported its results for the third quarter, which ended September 1, today (October 17).

Its revenue for the quarter, including commissions to affiliated advertisers, rose 31% to $5.54bn (3.19bn). Paid clicks – the measure of how often Google gets paid for ads it runs alongside web search results – rose 18% compared to the same period in 2007.

Canaccord Adams analyst Colin Gillis says: “Even in a downmarket, advertisers are going to be seeking customers. These results separate out Google from the eBays and the Yahoos.”

Google chief executive Eric Schmidt says the economic downturn has created “uncharted territory”. He adds: “We are very realistic about the macro environment, but we are optimistic about Google’s future.”

Schmidt says that web traffic and revenue growth were strong in all major parts of the world and searches were up in every industry.