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Google Shows Strong 3Q Revenue

Google on Thursday reported strong revenue growth for its third quarter, despite a faltering economy.

The advertising and search-engine giant reported $5.54 billion in revenue in the fiscal quarter that ended on September 30, 2008. Compared with last year's third-quarter revenue, the result represents a 31 percent increase. It was a modest three-percent gain compared with the second quarter.

Google CEO Eric Schmidt tempered his comments in announcing the results, saying the company is "realistic about the poor state of the global economy."

Schmidt noted that Google will continue to look at the long term with improvements in search and ads as well as "investing in the future" with enterprise, mobile and display offerings.

IT tech market pundit, Henry Blodget, estimated Google's enterprise worth at around $100 billion and a free-cash flow of $7 billion, according to a post Thursday in the Silicon Alley Insider.

The company delivered "a solid disciplined performance in the midst of a global economic meltdown," Blodget noted after the Google announcement. However, he cautioned that Google stock is not likely to boom in the near future. Google faces decelerating revenues, a maturing product cycle, a shortage of new products and a deteriorating economy.

Google is scheduled to release its new Android mobile device software platform in the United States later this month. The open-source platform will compete in the "smart-phone" market with the likes of the Blackberry, iPhone and others.

Google makes most of its money from search-result text ads. In addition to branching out with Android, Google makes online applications and recently released a beta of Chrome, its new Web browser.

More than two-thirds of Google's third-quarter revenues were generated by Google-owned sites, according to the report. That's up 34 percent from last year and four percent from last quarter. Partner sites through AdSense programs generated $1.68 billion during the third quarter, which represented 30 percent of the quarter's revenues.

More than half (51 percent) of Google revenues are generated abroad, according to the report. International revenues for the reporting quarter totaled $2.85 billion.

Google allocated $1.1 billion for grants to employees in 2008, prior to October 1. Google has approximately 20,000 employees worldwide.

About the Author

Herb Torrens is an award-winning freelance writer based in Southern California. He managed the MCSP program for a leading computer telephony integrator for more than five years and has worked with numerous solution providers including HP/Compaq, Nortel, and Microsoft in all forms of media.

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