Profit for Google Nearly Triples

By Alan Sipress
Washington Post Staff Writer
Thursday, February 1, 2007; D01

Google said yesterday that its fourth-quarter profit nearly tripled from a year ago, as the world's most popular search engine continued to expand its dominant role on the Web, especially in the highly lucrative area of online advertising.

The company said its profit increased to $1.03 billion from $372.2 million in the fourth quarter of 2005. Revenue reached $3.21 billion, up 67 percent. For the year, profit more than doubled, to $3.08 billion from $1.47 billion, while revenue rose 73 percent, to $10.6 billion.

Chief executive Eric E. Schmidt attributed the company's success to its search engine. "Search is getting better and better as we continue to innovate around the globe," he said in a conference call with analysts.

Search has become the main way users navigate the Web. It has also helped revolutionize the marketing business through ads tailored to match specific search requests.

The eight-year-old Mountain View, Calif., company has inexorably widened its lead over other search engines despite rivals' intensive efforts to improve their offerings. During the past two years, Google's share of U.S. searches expanded to 47 percent from 35 percent while Yahoo's slipped to less than 29 percent from 32 percent and Microsoft's fell to less 11 percent from 16 percent, according to ComScore Networks. Worldwide, Google is even more dominant, with 65 percent of all searches, according to ComScore.

Google's stellar earnings contrasted with far less encouraging results last week from Yahoo and Microsoft. Yahoo reported a 61 percent drop in quarterly profit as it continued to fall further behind in the contest for search-related ad revenue. Though Microsoft fared better, its executives acknowledged that they were unhappy with their declining share of the search-based-ad market.