Google defies economic downturn

Online search engine Google has shrugged off the global economic downturn and announced a 26% increase in profits in the third quarter due to a cost-cutting programme and strong advertising revenue.

The group, which is the internet’s most profitable company, exceeded analysts’ expectations by earning $1.35 billion (£778 million) during the quarter while quarterly revenue, including commissions to affiliated advertisers, increased 31% to $5.54 billion.

Greg Woodard of Manning & Napier in New York, said that Google will continue to monopolise the industry.

The results out-perform eBay and Yahoo, according to Colin Gillis of Canaccord Adams, who added that paid search is the best method of media advertising out there.

However, not wanting to be complacent, Google‘s chief, Eric Schmidt, said that even Google might not be immune to the economic downturn.

In August, Google controlled 63% of US online searches - double that of its two closest rivals - Yahoo and Microsoft.

Google, which has a workforce of just over 20,000 employees, saw its shares rise 10% following the results.

In related news, eBay, the online auction website, announced earlier this month that it was to axe 1,000 jobs - approximately 10% of its workforce.

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