MIAMI, 15 APRIL 2010 - Google grew its revenue and profit in its first fiscal quarter, exceeding Wall Street expectations and prompting the Internet company to express a commitment for "heavy investment" in its core and newer businesses.
Google's revenue hit US$6.77 billion in the quarter, ended March 31, up 23 percent compared to the first quarter of 2009. Subtracting commissions and fees paid to its advertising network and other partners, revenue was $5.06 billion.
Net income came in at $1.96 billion, or $6.06 per share, compared to $1.42 billion, or $4.49 per share, in the first quarter of 2009, the company said on Thursday.
On a pro forma basis, which excludes certain one-time items, net income was $2.18 billion, or $6.76 per share, compared to $1.64 billion, or $5.16 per share, in the first quarter of 2009.
The consensus estimate from financial analysts polled by Thomson Financial had been for Google to report revenue minus commissions of $4.95 billion and pro forma earnings of $6.60 per share.
It has been a busy quarter for Google, which never seems far from controversy. In January, it shocked the world by saying it would stop censoring its search results in China, even if it meant being forced to leave the country. The following month it launched its Buzz social media service, which was promptly criticized for privacy lapses.
After a two-month impasse, Google stopped censoring results in China in March by redirecting Chinese users of Google Search, Google News and Google Images from Google.cn to a site in Hong Kong.
Google explained the drastic move by saying it had been the victim of hacking attacks originating in China, through which Google intellectual property was stolen and the Gmail accounts of China human rights activists were compromised.
Despite dire predictions, the Chinese government doesn't appear to be blocking Google's services in the country any more than it has in the past, although government officials did condemn its decision to stop censoring. The company has even been able to retain its advertising sales staff and its research and development team in China.
On Thursday, Google Chief Financial Officer Patrick Pichette praised the way the company handled the China situation. "We still have sales [staff] in China, and the fact that we serve [search users] in and from Hong Kong doesn't stop us from having all the opportunities we want from the Chinese markets," Pichette said during a conference call to discuss the financial results.
Meanwhile, Google has tweaked Buzz several times since its launch to address the privacy concerns, and while the controversy has died down significantly, privacy advocates and the U.S. government still seem displeased with the service.
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