Tech giant, Google Inc (NASDAQ: GOOG) reported on Thursday that fiscal second quarter revenues climbed up by 21%, calming down Wall Street investors nerves’ as they feared that global economic slowdown will take its toll on the internet company.
In the recent past, many tech companies have trimmed their full-year earnings outlook due to flagging demand, mainly from Europe.
Following the announcement, shares of the world’s number 1 search engine leaped by 3% in afterhours trading.
While Company’s overall revenue stood at $12.2 billion for the quarter, its net income were at $2.79 billion, or $8.42 per share, on a consolidated basis.
The company said revenue from its existing Internet business totaled $10.96 billion in the quarter, up from $9 billion in the same period of last year. For the mobile advertising segment, Google said that efforts were on to make progress, with more than 1 million advertisers for its AdMob product.
Lately, in the backdrop of rising completion, economic slowdown, unfavorable foreign currency exchange market and industry wide trend of declining spending on internet advertising, Google’s advertising rates have been pressured. Furthermore, increasing number of smartphones users are accessing mobile versions of the Web. However, investors took some sigh of relief as Google reported 42 percent surge in overall clicks on its search ads during the second quarter.
When asked about company’s future plans for its hardware business, Google’s Finance Chief Patrick Pichette said that “it was still in the process of evaluating every business and division of Motorola”. In May, Google acquired Motorola for $12.5 billion.
Investors have some concerns about Google’s foray into the hardware business, where margins are shrinking and competition intensifying with the likes of Apple Inc and Samsung Electronics in the fray.
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