That’s how Google’s chief executive, Larry Page, summed up his company’s third quarter.
The nation’s economy may be stalled. Concerns over a global recession may be in overdrive. But Google’s digital advertising engine delivered another NASCAR-worthy performance, even with the economic head winds, sending its shares sharply higher.
In after-hours trading, Google shares rose $36, to $595, up more than 6%. The company released its results after the close of regular trading.
Google’s quarterly sales and profit crushed Wall Street estimates as businesses shelled out more on ads to reach online consumers, showing yet again why the Internet search giant is far less vulnerable than most in the advertising industry. The vast majority of its revenue comes from advertising, chiefly search ads, which are more popular in a rough economy as businesses look to track the effectiveness of their ad dollars.
Analysts say Google is also gaining market share in display and mobile advertising, two key areas of growth.
“Google really seems to be firing on all cylinders,” said Edward Jones technology analyst Josh Olson.
Google earned $2.7 billion, or $8.33 per share, in the three months that ended in September. That was up 26% from nearly $2.2 billion, or $6.72 per share, a year ago. Revenue rose 33% to $9.7 billion from a year earlier.
“Not bad for a 13-year-old,” Page boasted in a conference call with analysts.
Pumping out those kinds of results should allay some doubts about Page’s leadership, analysts say. The Google co-founder got a lukewarm reception when he took over as chief executive in April, but Google has soared past analysts’ forecasts in both quarters since.
Still, investors are concerned about Page investing heavily in what he says is Google’s future, buying up companies such as Motorola Mobility, in a $12.5-billion acquisition, and hiring thousands of employees — even as storm clouds darken the horizon.
Analysts are forecasting tough times for Google in 2012 unless the economy rebounds, particularly in Europe where Google is already experiencing some softness.
Excluding employee stock compensation, Google’s operating expenses rose by nearly 40% to $6.1 billion. Google added nearly 2,600 workers in the third quarter for a total of more than 31,500 employees, all but assuring that 2011 will be the biggest expansion year in its 13-year history.
Page has curtailed some spending by dumping 20 Google products so employees can divert their attention to more promising initiatives such as its new social network Google+, he said.
Page touted the success of Google+, saying it has added more than 40 million users and 100 features. He also said that engagement is “phenomenal,” with users uploading more than 3.4 billion photos.
Google is also focused on its fast-growing mobile business. Its Android mobile software is already the world’s most used smartphone platform, powering 190 million devices, up from 135 million in July.
Page said that ad revenue for Google’s mobile business is more than $2.5 billion, up from $1 billion a year earlier, a milestone that analyst Olson called “impressive.”
The Motorola deal, which Google says it expects to close this year or in early 2012, will come with a large patent portfolio and the hardware manufacturing capacity Google needs to develop its own line of smartphones.
Analysts applaud the acquisition for addressing the threat of patent litigation over Android, including a high-profile trial with Oracle expected to begin this fall. But they remain worried about Google building its own phones, a low-margin business that could undermine other manufacturers’ use of Android software.