Google Internet business defies econ worries, ad clicks surge
By Alexei Oreskovic
SAN FRANCISCO (Reuters) - Google Inc's core Internet business increased revenue by 21 percent in the second quarter, easing Wall Street worries that a slumping global economy would take a toll on the company's online advertising.
Shares of the world's No.1 search engine were up about 3 percent in after hours trade.
Google, which reported its first set of quarterly results since its May acquisition of Motorola Mobility for $12.5 billion, offered few details about its plans to expand into the hardware business, focusing instead on what it described as healthy trends in its traditional online advertising business.
"The stock is working after hours because core search seems to be working really well," said ThinkEquity analyst Ronald Josey.
"I don't think it was a knock-the-cover-off-the-ball quarter, but a quarter that showed that despite the fears around macro and FX, the company continues to execute really well," said Josey.
Google's advertising rates continued to be pressured by adverse macroeconomic and currency conditions and by consumers' increasing use of smartphones to access mobile versions of the Web. But investors took comfort in the 42 percent surge in overall clicks on Google's search ads during the second quarter.
"Paid-click volume is really strong; it's a good thing. The volumes are accelerating and usage of Google has not stopped, it has just continued," said Susquehanna Financial analyst Herman Leung.
Google said revenue for its existing Internet business totaled $10.96 billion in the quarter, up from $9 billion a year earlier. Continued...