• by Shankar Gupta , July 21, 2006

Search giant Google Wednesday reported second-quarter net income of $721 million, or $2.49 per share excluding stock-based compensation--well above the $2.22 per share that analysts had predicted, and 110 percent higher than the same period last year.

The company's revenue totaled $2.46 billion--up 77 percent from the same period last year--with revenue from Google's own sites, which are largely monetized by AdWords sponsored links, accounting for 58 percent of the total.

During a call with press and analysts, Google brass touted the new products released in this quarter, especially its new electronic payment system, Google Checkout. "We were very happy to introduce Google Checkout. We've spent a lot of time thinking about how we can help users shop more quickly online, and how we can help our advertisers get more sales," Google co-founder Sergey Brin said. "We have already received very positive feedback from users, and we are seeing very good adoption rates," he said, citing Buy.com, BlueFly, Starbucks, and BackCountry.com.

Google co-founder Larry Page also said that Google's click-to-play video ads on the AdSense network drew high-value brand advertisers. "Many large and small advertisers are already taking advantage of click-to-play video ads, while other companies like GM and Honda are running their TV ads on the Google network to extend their reach," he said.

Industry analyst Greg Sterling contrasted Google's overall positive report with that of Yahoo, which two days earlier said it was going to delay an upgrade to its search engine marketing offering. "Google's growth has been much more accelerated than Yahoo," Sterling said. "It reflects two things--Google's continued dominance in paid search, and their greater ability to drive more revenue per search."