Google Revenues Soar 70 Percent

Oct 23, 2006  •  Post A Comment

Google further widened its lead over Yahoo last week with a robust earnings report that showed a whopping 70 percent increase in revenues for the third quarter of 2006 compared with a year ago.

The No. 1 search engine reported revenues of $2.69 billion and nearly doubled its third-quarter profit, based on increased ad sales.

Google’s healthy ledger report came just two days after Yahoo disappointed Wall Street with the news that its third-quarter profit fell 38 percent on declining ad revenues from the slowing automotive and finance sectors.

Google CEO Eric Schmidt addressed concerns during an earnings call about copyright infringement on YouTube, which Google is slated to acquire. He said the company will rely on the Digital Millennium Copyright Act in dealing with copyright issues.

New media research firm eMarketer reported last week that Google’s share of total U.S. Internet ad revenue checked in at 25 percent this year, compared with 18 percent for Yahoo. That is projected to rise to 30 percent next year, while Yahoo is forecast to hold steady at 18 percent.

“Google’s dominance is now quantified,” said David Hallerman, senior analyst with eMarketer. “While Google may not be a monopoly in the traditional sense, since its customers-users and advertisers-could readily choose another search engine, for one company to have one-quarter of a market is unheard of.”

Audience measurement firm Nielsen//NetRatings reported that Web traffic to Google grew 22 percent for the quarter compared with a year ago. Google’s monthly unique audience is 98.4 million and the company accounted for half of all searches conducted in September, compared with 23 percent for Yahoo.

The bright spot for Yahoo came in the area of video. Yahoo Video ranked as the fastest-growing channel on Yahoo from the third quarter of 2005 to the third quarter of 2006, followed by Yahoo TV, Nielsen said. In the third quarter of 2006, Yahoo Video lured a monthly audience of about 5.7 million, up 245 percent from 1.6 million visitors a year ago. Yahoo TV drew a unique audience of 7.9 million in the third quarter, up 38 percent from 5.7 million in 2005.

Nielsen said Google Video fell below its measurement cut-off a year ago, but that the video service grew to 16.7 million unique users in September 2006, up from 1.62 million in October 2005, the first month Nielsen reported Google Video figures.