No Summer Slump For Google

In the dot-com era, companies used to talk about “the mo.” Mo, or momentum, was a quality they believed would let leaders maintain their lead. Google’s got the Mo.

Earnings for the third quarter 2005 hit a new high, doubling revenues year-over-year to $1.05 billion.

CEO Eric Schmidt warned analysts during the previous conference call that growth might slow over this quarter, saying the third quarter tended to be slower for Internet traffic and ad spending. The results blew away those lowered expectations.

Google remained the dominant search provider, handling 45.1 percent of all searches in September 2005, according to Nielsen/NetRatings; Yahoo ranked second with 23.3 percent, and MSN trailed with 11.7 percent.

“This momentum shows we’re effectively connecting with our users and customers,” Schmidt said on a conference call with analysts and journalists today.

Google is riding high on the trend of large advertisers moving more of their budgets online, said Jonathan Rosenberg, vice president of product management. “We’re moving into the brand budgets with big, Fortune 500 companies. This is a big secular trend, benefiting Google and other online properties.”

Yahoo , which announced its earnings on Tuesday, said consumer packaged goods manufacturers are leading brand advertising and starting to move heavily into search advertising, as well.

Google’s non-search offerings have begun to pay off — at least in terms of audience — according to Nielsen/NetRatings.

Google’s total traffic grew 30 percent year-over-year, Nielsen said.

Gmail skyrocketed by 249 percent, from 1.7 million unique visitors in September 2004 to nearly six million in 2005. Its Blogger group grew by 138 percent, measured by a unique audience of 6.2 million last September to 14.7 million in September 2005. Google Maps went to the moon and back with a 752 percent growth rate from 1.7 million unique visitors in February to 14.4 million in September of 2005.

Executives deflected questions about how or when they might try to monetize these non-search offerings. Co-founder and president Sergey Brin said the company saw Gmail not as a moneymaker, but as a platform on which to build more services. “Advertising continues to drive most of our business, and we continue to expand our advertising products,” he said.

They also blew off queries about rumored moves into classified listing search, VoIP and thin-client computing, also known as the Google operating system.

Schmidt said analysts shouldn’t base speculations on what Google’s competitors did, saying, “We don’t do same thing as everyone else does. We try to see new problems and new markets.”