Recession be damned. Google has posted its biggest quarterly profit of all time.
Its record $1.64bn is 27% increase on this time last year. And its three-month revenue of $4.38bn is considerably higher than analysts expected too, having grown at its fastest rate since the credit crisis hit the US in 2007.
The news is a much-needed injection of optimism for ailing internet companies, who’ve bit hit exceptionally hard by the widespread withdrawal of ad revenue online. As MSN News explains: “Google is considered a good barometer for the state of online commerce because its search engine serves as the hub of the web's largest advertising network.”
Google CEO Eric Schmidt is understandably hopeful and happy. He told financial analysts: “We believe the worst of the recession is behind us and now feel confident about investing heavily in our future.”
Encouraging news indeed for the online world. But let’s take it with a pinch of salt. Google is, after all, a super-company: the most-visited website in the world and a brand consistently voted as one of the top ten strongest globally. It can focus its efforts wherever profit is most likely (whether that means a certain country or an application that’s proving popular) precisely because of its phenomenal reach. It has its fingers in so many pies that it can flick its efforts on or off according to where’s making most money as much as it likes.
That’s not to say online advertising isn’t picking up. We hope as much as you do this news signifies its heady return. But it is a word of caution before you start tripling your revenue forecasts. You’d be wise not to break out the bubbly just yet unless you have a mini-multitude of revenue streams that allow you to pick and choose where to extract profit from, as Google does and can.
Be optimistic, of course, but keep on diligently with the bootstrapping until there’s evidence the Google effect is trickling down to smaller businesses too.