Even while they increased capital spending by 73%, they still made a huge gain. Most analysts were predicting a bad quarter due to the increased spending. But their profit margin also grew by 1.4% to 63.5%. Their sales went up 66% in the same period. Their total revenue for the quarter: $3.66 billion.
Another interesting factor is the internationalization of Google:
Sales outside the United States now represent 47% of all of Google’s revenues, compared with 42% in 2006. That upward trend should continue, Google executives said.
It’s interesting to think just over half of all Google users are in the US! They have a ton of room to grow, which makes one realize just how much bigger they could become.
This comes only days after Yahoo and Microsoft were shown to be bleeding away market share to Google. It was announced only days ago that Yahoo’s revenues declined by 11%. Consequently, their stock also fell 12%, showing just how valuable search is to Yahoo. I really hope Yahoo realizes the pile of gold they are sitting on before it’s too late… That, or they need to move away from the search business and focus on their amazing content business (music, pictures, social networking, chat, email, videos, etc.).
So with this unstoppable growth, what’s next? Why, expanding into new markets of course. Google is now focusing more energy than ever in diversifying its business model, as shown by its recent $3.1 billion commitment to buy DoubleClick, one of the largest pay-per-action advertising firms on the net. It’s very possible that we can expect more purchases by Google this year as it tries to use its cash surplus to get even further ahead.
If anybody is paying attention: this is in direct opposition to what Google’s CEO said last month about his intention on buying other companies. It’s hard to assess why he would mislead the public on that issue, but it likely has to do with keeping his lips sealed about pending deals. Still, it leaves the door wide open about what Google plans to do with all of this excess cash. Most likely, we should see them buying up more companies while they have the cash flow to cement their lead.