Google is poised to dominate another internet search market, its executives said, as the company reported that the worst of the recession was over.
Reporting a rise in third-quarter profits and sales ahead of analysts’ expectations, Google said its Android operating system for mobiles was set to take the group into another lucrative market: mobile search advertising.
As millions of consumers start using their new smartphones to search online, mobile advertising is expected to become a huge growth area. Kelsey, the research firm, has projected that the market will expand from $160 million (£100 million) in 2008 to $3.1 billion in 2013.
After a slow start last year, there are now 12 Android phones coming to 32 carriers in 26 countries. Eric Schmidt, Google’s chief executive, said: “Android adoption is about to explode.”
Google has made its operating system “open source”, meaning that handset makers can use it for free in their mobile phones, helping them to bring new products to market more quickly and more profitably.
Google aims to get more people online via their mobiles, and to get them using Google for their searches, so that it can deliver advertising against the queries. The Android system is optimised for Google applications.
In the UK, Android phones include the Motorola DEXT, the T-Mobile Pulse and the HTC Hero. Google search is the preferred option for many smartphone users, regardless of the handset’s operating system.
Analysts predict that local searches on mobiles — looking for the nearest pizza delivery company, for example — will prove particularly popular.
Patrick Pichette, the chief financial officer, said that Google’s mobile searches had grown by 30 per cent, quarter on quarter. He did not reveal the total number of searches, nor their value to the company.
Google’s domination of internet search advertising has given it vast piles of cash for branching out into new markets. The company said it was recovering well from the recession, which had affected it much less than other technology and media companies. It said the amount of money that advertisers pay for the text adverts, which appear alongside search results, as well as the number of clicks on those ads by web surfers had increased quarter-over-quarter.
Net income in the third quarter was $1.64 billion, or $5.13 a share — an increase of 27 per cent from $1.29 billion, or $4.06 a share, a year earlier, the company reported. Revenue for the three months to September rose 7 per cent to $5.94 billion.
Mr Schmidt said that the company was back in the market for “strategic acquisitions, both large and small”.
YouTube now delivers a billion video views a day, or seven billion a week. Mr Pichette said that the company was making money from about one billion of those weekly views on YouTube, the popular but unprofitable video site that Google bought for $1.65 billion in 2006.
He reiterated comments made in the last quarter that YouTube was on track to become profitable in the “not too distant future”.
Ambition writ large
Google has signalled its intention to grab a slice of the literature sector by announcing the launch of
an online service for booksellers, called Google Editions, that will enable readers to buy books and read them on gadgets ranging from mobile phones to e-book devices. Readers will have some half-a-million publications available in the first half of next year.
A spokesman for Google said the project meant that it could now offer an alternative to the Amazon Kindle reader.
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