Google wins search for profits

INVESTORS in search engine Google have found what they are looking for ? profits, and lots of them. The company's first-quarter profits soared to $369.2m, six times the $64m it recorded in the same period last year.

The huge increase exceeded even the most optimistic financial analysts' forecasts. Most had pencilled in a 92 cents per share profit but the company produced a figure equivalent to $1.9 per share, compared with 24 cents this time last year.

Google benefited from a low effective tax rate of 19% during the quarter but Caris & Co analyst David Garrity said the figures were phenomenal. 'These guys are really in a sweet spot in their industry,' he said.

The company joined the hi-tech Nasdaq stock market in the US just eight months ago and produced scenes reminiscent of the dotcom boom as investors rushed to buy stock.

Google shares floated at $84 and on Thursday closed at $204.22, up $6.12 or 3.1% on the day. In extended trading they were marked almost a further 10% higher, valuing the group at $64bn. At this level, Google's founders Larry Page and Sergey Brin are worth about $8bn each.

Google's success reflects the importance of internet search to companies that hope to reach out to customers on the web. Google earns money from 'click-throughs' on text-based adverts that appear alongside the results of online search requests.

Analysts believe that Google's prospects will change as MSN and Yahoo take some of the market away from the company, but so far it has cornered a significant share.

Google processed 2.06bn search requests in March compared with 907m for Yahoo, according to Nielsen/NetRatings, the internet research firm. Google's name has even entered common parlance as a verb, meaning 'to search on the internet'.