Google beats earnings forecast on 11 per cent revenue rise

Google said second-quarter net income climbed 2 per cent to US$3.4 billion (S$4.6 billion).
Google said second-quarter net income climbed 2 per cent to US$3.4 billion (S$4.6 billion).REUTERS

SAN FRANCISCO (AFP) - Google shares soared on Thursday after the Internet titan beat second quarter earnings expectations by riding hot growth of mobile search and advertising on YouTube.

The Silicon Valley-based company said that second-quarter net income climbed 2 per cent to US$3.4 billion (S$4.6 billion) on an 11 per cent rise in revenue to US$17.7 billion.

Google's shares soared more than 11 per cent in after-hours trade to nearly US$650 after marking a 3.5 per cent gain during the regular session prior to the earnings release.

"We continue to close the gap between mobile and desktop search monetisation," Google's new chief financial officer Ruth Porat said during her first earnings call at the company.

She credited work done to improve user experiences on mobile devices along with the quality of ads, as well as finding ways to merge online activities with real-world commerce.

Porat said desktop search-based advertising also posted solid revenue growth.

And Google's streaming video website YouTube saw substantial growth in viewer engagement during the past year, attracting marketers to its advertising platform.

Time spent watching YouTube videos on smartphones or tablets has surged along with overall viewer time spent on the website, Google said.

YouTube is focused on "re-inventing the television experience for the Internet age," Google chief business officer Omid Kordestani said.

Google expects to boost its earnings in the future by attaching "buy buttons" to mobile ads to make shopping easier for smartphone users.

The introduction of "Purchases on Google" came as Facebook and Pinterest also try to make shopping seamless for people using their sites, putting themselves in position to profit from transactions or related advertising.

"Although we're still in early experiments with a limited number of retailers, we see 'Purchases on Google' as a big step towards helping retailers drive more mobile conversions and win more customers," Google shopping product management vice-president Jonathan Alferness said in a blog post.

Mobile devices, typically smartphones, are increasingly consulted before or during shopping trips in the United States, influencing nearly a trillion dollars in in-store sales last year, according to Alferness.