The company yesterday reported a 46% rise in net income for the quarter to September 30, up to $1.07bn, on revenue that was up 57% at $4.23bn. Non-GAAP earnings per share was $3.91, beating the Wall Street consensus estimate of $3.77.
While soaring profits, revenues and beaten estimates are par for the course with Google, in recent months there has been more focus on the company’s expenses and hiring, which looked in danger of outpacing revenue growth.
In July, the company reported that its quarterly earning actually fell shy of analysts’ estimates for the first time, largely due to an increase in hiring. The trend up bulking up the workforce did not let up in Q3.
Google added about 2,100 new staff during the quarter, 300 of whom came from its acquisition of email security services provider Postini, which closed during the period. It ended September with 15,916 employees on the payroll.
Chief executive Eric Schmidt said on a conference call that many of the new hires were recent college graduates with whom employment contracts had been signed several months ago. Tighter controls have now been placed on hiring, calming investors’ nerves.
Google continues to plough money into its data centers, spending $553m on its infrastructure during the quarter. This is not likely to let up, especially considering the multitude of parallel markets, such as wireless and cellular, that Google is believed to be interested in.
At the top line, almost all of Google’s revenue still comes from its web site advertising services, Adwords and Adsense. Revenue from its own sites, as opposed to partners, is growing fastest.
The company saw $2.73bn, or 65% of the total, come from its own sites, such as Google.com. This number was up 68% on the same quarter a year ago, up 10% sequentially.
Partner sites generated 34% of the revenue, $1.45bn. This was up 40% on last year and 8% sequentially. Google paid out $1.22bn in traffic acquisition costs to partners in the quarter, down one percentage point in terms of the share of overall revenue, compared to last year.
