Google profits beat expectations

Google, one of the most popular online search engines, has beat analysts’ expectations as first-quarter profits increased to $1.31 billion (£658.5 million), a rise of 30% compared with 12 months ago.

Furthermore, sales were up 42% to $5.19 billion for the quarter ended 31 March.

The results have eased concerns of a slowdown in online advertising. Shares in the company have fallen this year due to fears of a slowdown. However, following the news, shares increased 18% in after-hours trading.

With regard to market share, Google is still ahead of its competitors. In February, it captured 63% of internet queries worldwide - up from 62% in December and made up for 60% of US searches in March.

Eric Schmidt, chief of Google said innovation in search, ads and apps helped to boost earnings growth.

Colin Gillis, an analyst with Canaccord Adams, said it’s a good time to be a Google bull, the boys delivered.

Google makes its money when internet users click on the paid-for-links on the right hand side of the website which takes them through to the adverts.

Analysts believe Google’s strong performance could enhance Microsoft’s determination to buy Yahoo even if it means increasing its $44.6 billion - a move that it has so far rejected.

However, Yahoo is keen not to be bought by Microsoft so has even teamed up with Google in a 2-week trial which will see search-driven Google adverts alongside the search results of Yahoo’s website.

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