Internet giant Google announced its second quarter revenue increased by 24% to $US6.82 billion from the previous corresponding quarter, also admitting it spent $US100 million defending itself in a copyright case against entertainment giant Viacom.
The results call also revealed the growth of the Android mobile platform, with the Android Apps market now holding 70,000 apps with searches on Android devices growing by 300% over the past 12 months.
The claim comes after analytics group ComScore confirmed the Android platform gained 4% market share of US smartphone subscribers from February to May, this year – and it was the only platform to experience an increase.
The search giant announced profits also grew to $US1.84 billion from $US1.48 billion over the past 12 months, but that figure is actually down from the $US1.96 billion figure recorded during the first quarter of the year.
Net income also declined from the first to second quarters, with a 3% drop in paid clicks and a 1% fall in network revenue blamed.
The figure actually disappointed Wall Street investors, who were looking for more growth. Shares dropped 4.5% after the announcement due to concerns over cost increases.
However, comments from Google suggesting it is moving back into an investment mode, rather than focusing on research and development, have relieved some concerns.
Google-owned sites accounted for 66% of total revenue to $US4.5 billion, which is a 23% increase from the same period last year. Google partner sites generated $US2.06 billion through AdSense. The company also announced 1,000 new employees had been added since March 31, bringing the headcount to 21,805.
Meanwhile, TechCrunch has reported the company was “very pleased” with the recent court decision to throw out the Viacom copyright case, but admitted it spent a massive $US100 million defending itself.
The case, which was worth $US1 billion, had Viacom suing Google for allegedly allowing pirated videos to be posted on YouTube. The judge ruled in Google’s favour, saying that “mere knowledge of prevalence of such activity in general is not enough” to fine the company.
It was also pointed out this $US100 million was invested before the case even went to trial – if the judge had ruled in Viacom’s favour, the legal costs would have been much higher. However, senior vice president of product management, Jonathon Rosenberg, said the decision provided “more clarity” on what YouTube could or couldn’t do.
“[The decision] gives us more room for experimentation,” he said, also adding that advertisers are now using the site in more interesting ways.
Much of the presentation was focused on the Android mobile platform, with the company confirming a 300% rise in search queries made from Android-powered devices.
“Android search grew 300% in the first half of 2010. It’s exploding. Mobile has grown 500% in the last two years in traffic. Android is an accelerator of that,” the company said.
The Android Market now sits at 70,000 apps, the company said, compared to 30,000 in April, with Rosenberg saying it is still too early to see how the Chrome OS will compare with the mobile platform.
“We’re mostly focused on Android, on building out the platform, on getting more smartphones out, and on the Chrome side, it’s still too early to say.”
When questioned whether moving into the mobile platform market was an offensive or defensive move, he said that “we did it for offensive reasons, not defensive reasons”.
“We think an open ecosystem is incredible important. And we know that smartphones create a new set of activities for search and transaction. It’s both defensive and offensive.”
The company also confirmed it has $30.1 billion in cash as of March 31. Chief executive Eric Schmidt said the quarter was solid, with “very strong growth” in emerging businesses.
“We saw strength in every major product area, as more and more traditional brand advertisers embraced search advertising and as large advertisers increasingly ran integrated campaigns across search, display and mobile. We feel confident about our future, and plan to continue to invest aggressively in our core areas of strategic focus.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
