Google Quantifies Its Momentum

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Google’s third quarter earnings announcement today came in strong, as expected given the company’s growing domination of search and momentum over the last several months. The other big players may be struggling, but Google has the numbers to show that they are not. Gross revenue rose 70% and quarterly profit rose 92% of the same period last year. Net income this quarter was $733.4 million compared to $381.2 million in the same quarter last year. That’s $2.36 per share, up from $1.32 per share in the same quarter last year.

Google faces questions about declining ad budgets, click fraud and product overload but the company’s dominance continues to grow. While Yahoo! and Microsoft are just starting to roll out their own contextual advertising strategies, Google remains a moving target. Yahoo! on Tuesday announced a quarterly net income decline of 38% to $158.5 million. Microsoft will make their quarterly announcement one week from today but reported a quarterly income last quarter that was three times the size of Google’s income announced today.

Nielsen//NetRatings came out with new numbers today finding that Google’s market share in search has grown 24% over the last year to 50% of the total market. Yahoo! grew 12% to 23% market share and MSN/Live dropped 8% to a 6% market share.

CEO Eric Schmidt said in the company’s earnings call that the company’s success was based on five factors: growth in users, increased ad quality, diversity of business activity, a “blizzard of new product launches” and Google’s partner strategy. Schmidt cited partnerships with eBay, Dell, MTV, Fox/MySpace and the acquisition of YouTube in that order.

Sergey Brin started his discussion with the addition of historical archives in Google News, video search, Google Apps for Your Domain, and Google Docs. Brin said in response to questions that integration, or “Features not Products” is an important direction the company wants to move in for the future. Which is it? Diversity is our strength or product overload? Maybe that just means we’ll see fewer new Google products, but they are glad they have as many as they do.

Larry Page said Google has the greatest diversity of advertisers in the world because it’s easy to get involved in search, video and soon audio advertising. Page also highlighted the addition of coupons to Google Maps.

The company also said that future acquisitions would be made in cash, that YouTube’s stock deal was a one time action.

The future remains some what unclear with an office strategy that could succeed or fail, a video strategy that will face legal challenges and the first big competition in contextual advertising ramping up – but Google is looking well prepared for dealing with all of those challenges. While the rest of the big tech companies are experiencing relatively turbulent times, Google put the numbers on the table today to prove that they are going strong.

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