Facing what was perhaps the most important earnings call in company history, Google on Thursday met the Street's challenge, posting stronger than expected first quarter earnings thanks to robust
growth from its international operations. Gross revenue of $5.2 billion, up 42%, was in line with expectations, while net revenue (not including commissions paid to AdSense and other partners) was
slightly above, at $3.7 billion. Profit, excluding stock options, was a hefty $0.32 higher than consensus estimates, at $4.84 a share. The good news sent Google shares-which had fallen 35% since the
beginning of the year-surging $75 in after hours trading.
While the news was better than feared, it would be gross overstatement to say that Google "crushed" first quarter earnings. Henry
Blodget of the Silicon Alley Insider points out that Google would have missed earnings estimates had they not come down mid-quarter, as its U.S. business, which accounts for about half the company's
revenue, did decelerate materially, from 40% growth in Q4 to 30% in Q1. So did paid click growth, from 45% in Q3 to 30% in Q4 to 20% this quarter. However, the deceleration wasn't nearly as bad as
comScore's prediction of close to flat growth.
DoubleClick, meanwhile, contributed just two weeks of the quarter and was slightly dilutive to earnings. Omid Kordestan, Google's senior vice
president of global sales and business development, boldly proclaimed that DoubleClick would help Google become the world's largest display publisher, as 90% of the Web giant's pages can handle
display ads and will be integrated into one display network.
Read the whole story at Silicon Alley Insider »