Google's recent earnings increase is a positive sign for the search-engine giant, whose growth is being led by recovering online search ad activity, and could mean at least some future recovery for a larger chunk of the online ad market in the coming months.
Google reported revenues of $5.94 billion for Q3 2009, an increase of 7% compared with Q3 2008. GAAP net income in the third quarter of 2009 was $1.64 billion, compared with $1.29 billion in the third quarter of 2008. Non-GAAP net income was $1.88 billion in the third quarter of 2009, compared with $1.56 billion in the third quarter of 2008.
In terms of specific search ad statistics, aggregate paid clicks in Q3 increased approximately 14% over Q3 2008 and increased approximately 4% over Q2 2009. Average cost-per-click, however, did decrease approximately 6% over the third quarter of 2008 - but increased approximately 5% over Q2 2009.
Traffic Acquisition Costs (TAC), the portion of revenues shared with Google's partners, increased to $1.56 billion in Q3 2009, compared with TAC of $1.50 billion in the same period last year. TAC as a percentage of advertising revenues was 27% in Q3 2009, compared with 28% during the same period last year.
"While there is a lot of uncertainty about the pace of economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future," said Google CEO Eric Schmidt.
It is unlikely that these earnings will be replicated on an industry-wide scale, at least for this quarter. Analysts are expecting Yahoo's Q3 numbers, which will be released Oct 20, to show declining profit and sales, according to the Wall Street Journal.
Yahoo, though, has not yet leveraged the advertising tie-up it signed with Microsoft earlier this year. Once that deal is approved, it should provide a boost for both Yahoo and Microsoft's up-and-coming search engine, Bing. In August, Bing saw a slight increase in its share of the search market - from 8% to 9.3% - still well behind search partner Yahoo’s 19% and undisputed market leader Google at 64%.
