Internet search engine Google last night reported quarterly profits which beat expectations, helped by cost controls. But chief executive Eric Schmidt said the economic environment remained tough with internet users still searching but buying less.
Compared to other internet and media companies that depend on advertising revenue, Google has been extremely resilient to the economic downturn, though its revenue growth has slowed sharply from the heady 50% rates it previously enjoyed.
Google reported first-quarter revenue of $5.51 billion, up 6% from a year earlier but down 3% from the 2008 fourth quarter. This was the first quarterly decline in Google's history.
Net profit for the quarter ended March 31 was $1.42 billion, or $4.49 cents a share, up from $1.31 billion, or $4.12 a share, a year earlier. The figures were ahead of Wall Street expectations.
Google executives said lower labour costs, as the company reset performance-based bonuses for the new year, kept expenses in line. And after several years in which Google expanded its workforce, the company's staff numbers declined slightly in the first quarter to 20,164 employees worldwide.
Google said paid clicks, by web surfers on its text-based search ads, rose 17% in the first quarter from a year earlier. But the revenue that Google derives per click appears to have declined, as advertisers reduced the bids they make for keywords in Google's auction-based advertising system.
