Google steams ahead

Google continues to be the king of search. The runaway success of the company has seen more stellar growth over the past year with revenues rising by three quarters compared with the equivalent quarter last year.

In contrast, the main rivals in search and contextual advertising are being left behind with Yahoo!’s share price hit by so-so results and the delay in its new ad software and Microsoft is struggling to keep up with its release schedule.

Google reported revenues of $2.46 billion for the quarter ending June 30, 2006, an increase of 77 per cent compared to the second quarter of 2005 and an increase of 9 per cent over the first quarter of 2006. Net income was up to $721.1 million compared to $592 million in the first quarter.

Google search is the powerhouse that drives the revenues. According to ComScore, Google’s global share of Internet searches rose to 62 per cent in May from an already dominant 55 per cent a year ago. In contrast, Yahoo’s share fell to 20 percent from 22 percent, while Microsoft’s share fell to 9 per cent from 10 percent.

However, not all is rosy for Google. Hitwise is reporting that while Google has garnered a lot of publicity for the blizzard of new services it has been offering over the past year or so, hardly any of them are making an impact.

Search still accounts for over 80 per cent of Google traffic with other properties such as Mail and News accounting for only 8.56 and 1.38 per cent of traffic respectively. Other high profile sites such as Blogger, Video and Froogle struggle at around the half a per cent mark.

Not that Google is short of ready cash to keep these underperforming elements going. As of the end of June, Google had $9.82 billion in the bank as ready cash or equivalents. The figure includes $2.06 billion from the public offering that closed in early April as well as a $1 billion investment in AOL in early April.

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