For the three months that ended March 31, Google earned $2.89 billion, or… (Boris Roessler, European…)
Bolstered by a rise in paid advertising clicks, search engine giant Google Inc. posted a 61% jump in first-quarter profit.
The Mountain View, Calif., company also announced a new stock structure that will keep its founders, Larry Page and Sergey Brin, in control of the company.
Page, who is in his second stint as Google's chief executive after taking over from Eric Schmidt a year ago, said Google "saw tremendous momentum from the big bets we've made in products like Android, Chrome and YouTube."
"Since becoming CEO again last April, I pushed hard to increase our velocity, improve our execution and focus on the big bets that will make a difference," he told analysts during an earnings call Thursday. "Google is a large company now, but we'll achieve more and do it faster if we approach life with the passion and the soul of a start-up."
For the three months that ended March 31, earnings totaled $2.89 billion, or $8.75 a share, compared with $1.8 billion, or $5.51, a year earlier.
Excluding certain items, profit was $3.33 billion, or $10.08 a share, compared with $2.64 billion, or $8.08, in the first quarter of 2011. That topped Wall Street's expectations for $9.64 a share.
Google also reported revenue of $10.65 billion, a 24% rise over the same quarter last year.
But tech analyst Colin Gillis of BGC Financial said the earnings strength was driven primarily by Google having its lowest tax rate in 17 quarters.
"These types of companies need to really exceed expectations, and the reality is, revenue was a little light," Gillis said. And "the quality of the earnings beat is low."
One major point of concern for analysts is the company's falling price for ads, which could be partly the result of cheaper mobile advertising.
Google said that the average cost per click, which includes clicks related to ads on Google sites and the sites of network members, fell about 12% compared with the first quarter of 2011 and about 6% from the fourth quarter of 2011.
Paid clicks, meanwhile, increased about 39% over the first quarter of 2011 and about 7% over the fourth quarter of 2011.
The company also said Thursday that it planned to introduce a new class of stock in a 2-for-1 stock split. Google said its board of directors had unanimously approved the proposal, which would "preserve the corporate structure that has allowed Google to remain focused on the long term."
The split will introduce a new class of nonvoting capital stock, and the shares will be distributed through a stock dividend to existing shareholders, Page said.
"We recognize that some people, particularly those who opposed this structure at the start, won't support this change — and we understand that other companies have been very successful with more traditional governance models," Page and Brin wrote in a letter to investors. "But after careful consideration with our board of directors, we have decided that maintaining this founder-led approach is in the best interests of Google, our shareholders and our users."
Google reported its financial results after the markets closed. During regular trading, its shares rose $15.05, or 2.4%, to $651.01; shares were little changed in after-hours trading.