Google rakes in the billions in Q3 ’08 results

Alex Zaharov-Reutt
Friday, 17 October 2008 11:10

Your IT - Home IT

Google’s Q3 2008 results show that it remains one of the Internet’s true goldmines, and even though economic hard times are here, which it is “realistic about”, it will still invest for the future.

Q3 results are in for the big G, and they’re good, with Google still raking in billions of dollars, sitting on a cash pile of US $14.4 billion (as of 30 Sep ’08), and with 20,123 full time employees, up from 19,604 (as on June 30 ’08).
 
For the quarter ending Sep 30 ’08, Google’s revenues where US $5.54 billion, representing a 31% increase from the same time last year, and even 3% up on the 2nd quarter of ’08.

Google says it reports its revenues, “consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the third quarter of 2008, TAC totaled $1.50 billion, or 28% of advertising revenues.”

Operating income for Google in this third quarter was $1.74 billion or 31% of revenues, growing from the 2nd quarter figures of $1.58 billion or 29% of revenues on a GAAP basis, while on a Non-GAAP basis operating income in Q3 ’08 was $2.02 billion/37% of revenues, comparing to Q2 results of $1.85 billion/34% of revenues.

While it’s true the full impact of the economic meltdown is yet to be truly felt by the world economy, Google is still keeping a firm eye on the future, with Google CEO Eric Schmidt saying: "We had a good third quarter with strong traffic and revenue growth across all of our major geographies thanks to the underlying strength of our core search and ads business.

“The measurability and ROI of search-based advertising remain key assets for Google. While we are realistic about the poor state of the global economy, we will continue to manage Google for the long term, driving improvements to search and ads, while also investing in future growth areas such as enterprise, mobile, and display,” continued Schmidt.

GAAP net income in Q3 was $1.35 billion, compared to $1.25 billion in Q2, non-GAAP in Q3 was $1.56 billion, compared to $1.47 billion in Q2 – with the figures all consistently showing better Q3 ’08 results for Google than Q2.
 
Google’s effective tax rate was 24% for Q3 ‘08

Google also expects “to continue to make significant capital expenditures”, with $452 million spent in Q3, of which the majority was spent on “IT infrastructure investments, including data centers, servers, and networking equipment.”

Finally, free cash flow in Q3 ’08 was $1.73 billion. For a greater breakdown of Google figures and more detail of network, sites and Adsense revenue, please see all the figures in Google’s statement.