- Revenue totaled $5.19 billion YoY increase of 42% & 7% stronger than Dec’07 figures. So even in the midst of a “recession” in its largest market – Google managed to grow revenue
- International Revenue increased from 47% to 51% of total revenue.
- AdSense Revenue is up 25% over last quarter and Paid Clicks are also up 20%
- Net income for the first quarter of 2008 was $1.31 billion as compared to $1.21 billion in Q4 of 2007 (8%)
- Google Sites Revenues hit $3.40 billion, or 66% of total revenues, YoY growth of 49% increase and 9% over Dec ’07 figures
Global Domination Is Not A Far Fetched Prospect
Google stays ahead of the game by paying attention to what’s important – driving core relevance improvements in both algorithmic search and sponsored (paid) listings. It’s admirable that Google dominates the Internet Landscape in the United States. However, I’m even more impressed by its strong foothold in key European Markets and it’s growing influence in the very competitive Asian Pacific Mkts.
I marvel at the progress Google has made in Japan, China, South Korea and India – against strong local players with all sorts of intangible advantages. At core is the unparalleled effectiveness of PageRank in providing market specific relevance, across diverse markets with very different languages. The use of Universal / Blended Search in S/Korea and Japan and the focus on Music Search in China – are smart, strategic initiatives. As is, the proliferation of Mobile Search and Mapping functionality in regions where PC sales are dwarfed by those of Mobile applications. Even the purchase of Youtube, though unlikely to ever be ROI positive, has enabled Google to further strengthen the ubiquity of Video Search, across different platforms.
Revenue from Intl Mkts hit 51% of total revenues, for the first time. UK alone accounted for $803 million. Google already generates Billion’s each quarter from European and S/American Mkts – It stands to gain even more once it’s only real competitor (YHOO), starts using adwords in key markets. Microsoft’s adCentre is the only other monetization platform which may have the resources to challenge Google – but without a strong presence in Key Global Mkts – it will likely cede Intl Search Business, to Google. (unless of course, it can buy Yahoo and revitalize Panama J).
Q1 Financial Summary
Google's results for the quarter ended March 31, 2008, include the operations of DoubleClick Inc. from the date of acquisition, March 11, 2008, through the end of the quarter, and are compared to pre-acquisition results of prior periods. The overall impact of DoubleClick in the first quarter of 2008 was immaterial to revenue and only slightly dilutive to both GAAP and non-GAAP operating income, net income and earnings per share.
GAAP operating income for the first quarter of 2008 was $1.55 billion, or 30% of revenues. This compares to GAAP operating income of $1.44 billion, or 30% of revenues, in the fourth quarter of 2007. Non-GAAP operating income in the first quarter of 2008 was $1.83 billion, or 35% of revenues. This compares to non-GAAP operating income of $1.69 billion, or 35% of revenues, in the fourth quarter of 2007.
GAAP net income for the first quarter of 2008 was $1.31 billion as compared to $1.21 billion in the fourth quarter of 2007. Non-GAAP net income in the first quarter of 2008 was $1.54 billion, compared to $1.41 billion in the fourth quarter of 2007. GAAP EPS for the first quarter of 2008 was $4.12 on 317 million diluted shares outstanding, compared to $3.79 for the fourth quarter of 2007 on 318 million diluted shares outstanding. Non-GAAP EPS in the first quarter of 2008 was $4.84, compared to $4.43 in the fourth quarter of 2007.
Non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP EPS are computed net of stock-based compensation (SBC). In the first quarter of 2008, the charge related to SBC was $281 million as compared to $245 million in the fourth quarter of 2007. Tax benefits related to SBC have also been excluded from these non-GAAP measures. The tax benefit related to SBC was $51 million in the first quarter of 2008 and $42 million in the fourth quarter of 2007.
Google Sites Revenues - Google-owned sites generated revenues of $3.40 billion, or 66% of total revenues, in the first quarter of 2008. This represents a 49% increase over first quarter 2007 revenues of $2.28 billion and a 9% increase over fourth quarter 2007 revenues of $3.12 billion.
TAC - Traffic Acquisition Costs, the portion of revenues shared with Google’s partners, increased to $1.49 billion in the first quarter of 2008. This compares to TAC of $1.44 billion in the fourth quarter of 2007. TAC as a percentage of advertising revenues was 29% in the first quarter, compared to 30% in the fourth quarter of 2007. The majority of TAC expense is related to amounts ultimately paid to our AdSense partners, which totaled $1.34 billion in the first quarter of 2008. TAC is also related to amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $143 million in the first quarter of 2008.