Google today reported its earnings for the second quarter, turning in a solid performance that slightly topped analysts’ expectations.
Total revenues for the quarter checked in at $5.52 billion, up 3 percent from the year-earlier period and ahead of the $5.49 billion analysts polled by Thomson Reuters had been expecting.
Net income for the period was $1.48 billion, or $4.66 per diluted share, up from $1.25 billion, or $3.92 per share, in the second quarter last year.
Excluding special items, Google (NASDAQ: GOOG) reported earnings of $5.36 per share, ahead of the Street’s consensus estimate of $5.08, and a 16 percent increase over the same period last year.
“We’ve had a good quarter, one that demonstrate our resilience in what continues to be a very difficult environment,” CEO Eric Schmidt said during a conference call with analysts.
“Advertisers and customer are obviously seeing the benefit of performance-based advertising,” Schmidt said. “We’ve also implemented careful cost controls.”
He added, “We remain focused on investing in technical innovation to drive growth in our core and new businesses.”
Today’s earnings come on the heels of a tough first quarter, when Google reported the first sequential drop in revenue in the 10-year-old company’s history.
Google’s balance sheet rises and falls on the strength of the advertising economy. Despite its dabbling in numerous other product lines (many of which have been aborted), 97 percent of Google’s revenue still owes to advertising.
Executives on today’s conference call made a point of talking up Google’s success in wringing ad dollars out of YouTube, the wildly popular but famously difficult-to-monetize video site Google acquired in 2006.
“On YouTube, monetized views have more than tripled over the last year,” said Jonathan Rosenberg, senior vice president of product management. Rosenberg said that YouTube was monetizing “billions” of views a month, largely through a pre-roll ad format and deals with professional production companies.
Google continues to dominate the search market with a share more than three times that of its nearest competitor, Yahoo (NASDAQ: YHOO).
Despite its commanding market position, Google has been on a bit of a public relations quest to tamp down the perception that it dominates online advertising, owing in part to the increasing scrutiny of government regulators.
“Search is still an unsolved problem,” Schmidt said, noting Google’s ongoing efforts to tune up its search engine to become “more social, more personal, and more intelligent.”
While the search rankings didn’t see much movement in the second quarter, third-place Microsoft (NASDAQ: MSFT) doubled down on its own search offering, redesigned and rebranded as Bing.
More recently, Google took another step toward direct competition with Microsoft when it unveiled its plans to deliver an operating system geared for netbooks to market next year.
Google’s Chrome OS is growing out of its Web browser of the same name introduced last year, another incursion into one of Microsoft’s business lines.
Google’s talk of an operating system has also revived questions about the propriety of Schmidt’s position on Apple’s board of directors, given that the two companies already compete in the mobile and browser markets. The Federal Trade Commission has been reviewing the matter, and Schmidt recently said he was rethinking the arrangement.
Update adds comments from conference call with analysts.