Google reports 54% increase in profits over 2009

Google saw off recession blues with a 54% increase in profits last year, totalling $6.52bn (£4.02bn) mainly thanks to advertising earnings.

Google

The search giant reported a 17% increase in its revenues between October and December, as its advertising earnings rose strongly, totalling $6.67bn (£4bn) during the quarter, up from $5.7bn a year earlier. Its net profit also shot up to $1.97bn (£1.21bn).

Google’s chief executive, Eric Schmidt, says: “Given that the global economy is still in the early days of recovery, this was an extraordinary end to the year.”

The company has now pledged to invest heavily in 2010 as it seeks to stay ahead in the search business that delivers the lion’s share of its revenue and as it spends on initiatives to expand into new markets. According to the latest Bellwether report, spend on search marketing has increased by 11.5% in the last quarter.

Google is facing increasing competition from Microsoft, which has struck a deal to provide Yahoo search technology. Bing was the fastest growing search engine in the US last month.

Google is also attempting to expand into the mobile phone market, with the recent move to sell the Nexus One smartphone directly to consumers, in an effort to put it in greater competition with Apple.

Its results come after Google said earlier this month that it may pull out of China due to concerns that Chinese human rights activities were the victims of cyber-attacks.

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