Google Off to the Races

For the quarter ended March 31, earnings rose to $1 billion, or $3.18 a share, from the year-earlier $592 million, or $1.95 a share. Gross revenue rose to $3.66 billion from $2.25 billion a year ago.

"The global growth of our core search and ads business and our focus on building our partnerships drove our strong results in the quarter," said Schmidt in a post-close press release. "We continued to expand our worldwide footprint, adding important new partners and growing our platform to increase our ability to deliver targeted and measurable ads. The ongoing expansion of our network allows us to improve the user experience through new opportunities and programs."

Paid clicks, which make up the overwhelming majority of Google's revenue, continued to soar. Combined clicks on Google's search ads and through its advertiser network increased 42% year over year and 13% sequentially.

Google's closely watched operating margins also edged up sequentially. Non-GAAP operating income in the first quarter of 2007 was $1.41 billion, or 38% of revenue. This compares to non-GAAP operating income of $1.20 billion, or 37% of revenue, a year earlier.

Although Google's traffic acquisition costs -- the dollars it shares with ad partners and the amount that's discounted to formulate net revenue -- moved higher on an absolute basis, it remained flat at 31% of advertising revenue.

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