Google topped financial analysts' revenue and pro-forma earnings expectations in its second quarter, which ended 30 June, the company said yesterday.
Google had revenue of $2.46bn (£1.3bn), a 77 percent increase on Q2 2005. Excluding the commissions it pays to third-party websites that belong to its advertising network, Google generated revenue of $1.68bn (£906m). The consensus estimate from analysts polled by Thomson First Call had been for revenue of $1.65bn (£890m).
Meanwhile, Google's net income came in at $721.1m (£389m), or $2.33 per share, up from $342.8m (£185m), or $1.19 per share. On a pro-forma basis excluding certain items, net income was $772m (£416m), or $2.49 per share, higher than the analysts' $2.22 per share consensus estimate.
Executives said they were extremely pleased with the results, particularly since the second quarter is traditionally slow for Google. Its business is almost entirely based on online advertising delivered to users of its search engine and of its partners' websites.
"We don't see any signs of approaching any limits to this vision. The opportunities before us really are unlimited at this point," Google CEO Eric Schmidt said during a conference call.
Google's earnings report contrasts significantly with the one from rival Yahoo, which disappointed analysts and investors on Tuesday and whose stock subsequently took a beating.
Among Google's areas of focus is the continued development of industry partnerships, such as the recent ones struck with Dell and Adobe, in areas such as content, distribution and access, he said.
Also a priority for Google is growing its business internationally. "You'll see more and more international focus, growth and expansion," Schmidt said.
Chief financial officer George Reyes warned that Google's margins may decline in the short term as the company increases its investments in the business. Capital expenditures reached $699m (£377m) in the quarter, including $319m (£172m) spent on property purchases. A significant amount also went toward IT infrastructure purchases, such as servers and networking equipment for data centres, Reyes said.