Google's profit rockets 69%

SAN FRANCISCO — Google Inc.'s first-quarter profit rose 69 percent, maintaining the online search leader's penchant for obliterating analyst estimates.

The stellar results released Thursday left little doubt that Google has widened its lead over its closest rival in Internet search and advertising, Yahoo Inc., whose first-quarter earnings eroded.

Google detailed its sparkling performance on the same day that several major U.S. newspaper companies announced another quarter of financial decay, underscoring an advertising shift that is enriching Internet upstarts at the expense of traditional media outlets struggling to adapt to a new order.

Born less than a decade ago, Google now reigns as the most profitable — and probably most powerful — force on the Web.

In the latest demonstration of its clout, Google earned $1 billion, or $3.18 per share, during the first three months of the year. That compared with net income of $592.3 million, or $1.95 per share, in the same period last year. It was also the second consecutive quarter in which Google earned $1 billion — nearly as much money as the nation's largest newspaper publisher, Gannett Co., made all of last year.

If not for expenses incurred for employee stock compensation, Google would have earned $3.68 per share. That figure topped the average estimate of $3.30 per share among analysts surveyed by Thomson Financial.

Quarterly revenue reached a new company high of $3.66 billion, a 63 percent increase from $2.25 billion a year earlier.

After subtracting advertising commissions and other payments to its partners, Google's revenue totaled $2.53 billion. That amount was about $40 million above analyst estimates.

"We are ecstatic about our financial results this past quarter," Google Chief Executive Officer Eric Schmidt crowed in a Thursday conference call with analysts. Schmidt, Google's CEO for nearly six years, also will become chairman of the board in a promotion announced Thursday.

Pleasant earnings surprises have become routine for Google, which has succeeded in beating analyst estimates in all but one of 11 quarters since its ballyhooed initial public offering of stock in August 2004.

That track record had helped elevate Google's market value to nearly $150 billion, even before the stock price surged $12.55, or 2.7 percent, in Thursday's extended trading. Google shares fell $4.36 to close at $471.65 in regular trading on the Nasdaq Stock Market before the report was released.