Posted October 16, 2008 6:17 pm by with 10 comments

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Google’s had a tough time over the last couple years, with Wall Street Analysts expecting almost exponential growth. When they first missed estimates, growing only 58% in Q2 2007 (the losers), some analysts thought it was the beginning of the end.

While they’ve bounced back from time to time (such as Q1 2008), Google is probably pretty happy to finally be sticking it to the analysts where it hurts the most—the bottom line—as they post an estimate-beating Q3, with 31% YOY growth in revenues. Paid clicks were up 18% YOY

Business Week reports on the earnings call, as well. Highlights include the Q&A session, which focused heavily on the current state of the economy:

Question about whether advertisers are changing behavior because of the economy. Not really, says Varian: “Advertisers are willing to take all the clicks we can give them at the current CPCs (cost per click),” and he thinks that will continue regardless of the economy.

Question about impact of economy on retail given eBay’s bearish outlook[*]: Varian, as he did last quarter, still think Google could actually benefit as people are careful about shopping and search even more for better deals.

Question about improvement in margins–from cost cutting or change in advertising arrangements? Pichette: “Across all categories of expenses, people have been very diligent” in watching expenses. Hiring was less than in previous quarters. Capital expenditures were lowest since Q1 2006, another analyst notes.

*eBay’s bearish outlook: eBay is finally back in the black, but its reported earnings today still left many analysts worried about eBay’s long-term outlook.

Google’s stocks closed up 9%, which is a heck of a lot better than when they reported only 58% growth, with stocks closing down 7%.

What do you think—is Google a buy or a sell?

  • Christopher Ross

    With all the negative press on the stock market and falling fuel prices etc. I can honestly say that I think this is some of the best news I’ve read all day! It’s really not all that surprising however. If you think about it, Google is poised to keep making money as long people keep searching for content and reading the internet. Not something we’re going to stop doing soon.

    Christopher Ross’s last blog post..Blog Round Up – October 16th

  • Saz

    The big G has the marketing reach to make it work for them but its really sad to see how many businesses are suffering these days

    Saz’s last blog post..Virgin Mobile Launches Mobile Broadband – Get Generous 3GB USB Virgin USB Sticks Now!

  • Mathew Browne

    No government-funded bailout necessary for Google then. It’s easy to forget at the moment that *shock, horror* some businesses are still making money!

    Mathew Browne’s last blog post..H2D Hair Straighteners

  • Internet Entrepreneur

    The less money people have for going out the more time they spend watching TV and browsing the Net. No wonder these media won’t go bankrupt.

    Internet Entrepreneur’s last blog post..Will the SEO era come to an end in 2 years?

  • Busby SEO

    Google will keep making money as long we keep searching for content and reading the internet. And that will not stopping in the next 2 years

    Busby SEO’s last blog post..By: shootantio

  • Downloadic

    I think google will always be in the top.

  • SoLinkable

    Is it time to buy Google stocks yet?

    SoLinkable’s last blog post..Yzerman to lead Canada’s efforts for 2010 Olympics

  • Zurpit

    Its great to see that Google is making lots of money, that means better service

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  • iPwner

    Go Google!

    iPwner’s last blog post..Week 9 NFL Power Rankings Titans Undefeated!