Google Reports $2.3 Billion Net Income For Q1

April 15th, 2011 at 11:15 am

Google has recently announced its financial results for the first quarter of the fiscal year. And it seems that the news may be a mix of good and not so good news. But all in all it is nothing serious that would topple the tech behemoth that Google is. At best, it may just be a chink in the armor and that the future is still looking quite good for Google.

Google recently shared its first quarter earnings report to its investors and the public, the period of which covered the start of this year and ending in March 31, 2011. The financial reports state that Google made a total of $8.58 billion in gross revenue for the first quarter. That’s good for a 27 percent increase to the previous year’s first quarter earnings. That only means that Google is still doing good, if not better, business.

But that number alone may not show everything. Google also reported higher than usual operating expenses. Operating expenses for the first quarter stood at $3.7 billion, a 44 percent increase from that of the same quarter in the previous year. Add to that the commission payments that Google paid to its ad partners for the first quarter that reached more than $2 billion along with other expenses, Google’s net income for the first quarter stood at $2.3 billion. That is a modest increase from the $1.96 billion net income that Google made in the same quarter the previous year.

Although the increase seems good news and shows a company that continues to improve revenue wise, the numbers don’t seem to be that good enough for its investors, so it seems. One cause of concern from the investor standpoint is that the increase in operating expenses recently may not be helping the company bottom line. A chunk of that expense was due to Google’s rush to hire more people at the beginning of the year. The company hired almost 2,000 new employees in the first quarter alone. The hiring rush may have been good news to the rising number of unemployed in the country, but the company investors look at it as a not so good news.

Another cause of concern for Google may be the potential loss of online advertisers that has recently moved into Google’s newest threat, the popular social networking site Facebook. This may further erode Google’s ad revenue in the coming years. But there is a cause for hope in other fronts for Google. Its rapidly growing Android business arm may be showing some vast improvements in its market.

Google stated in its report that there have already been a total of 3 billion Android app downloads installed worldwide. In addition, Google states that there are about 350,000 Android devices being activated each day. Although it might not directly affect Google’s bottom line, the numbers may show that the Android market may be on its way into becoming Google’s next potential revenue earner.


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