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Google reports strong 2009 fourth quarter results
22 January 2010 , Written by Dhruv Tanwar
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Google CEO Eric Schmidt said the company had a strong fourth quarter, marking 17% year over year revenue growth. He said the company's performance in 2009 underscored the strength of its management team, the resilience of our business model and the pace of innovation within our product and engineering teams.

Google reported revenues of $6.67 billion for the quarter ended December 31, 2009, an increase of 17% compared to the fourth quarter of 2008. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). It said that during the fourth quarter of 2009, TAC totaled $1.72 billion, or 27% of advertising revenues.

GAAP operating income in the fourth quarter of 2009 was $2.48 billion, or 37% of revenues, as against a GAAP operating income of $1.86 billion, or 33% of revenues, in the fourth quarter of 2008. Net income in the fourth quarter of 2009 was $1.97 billion, compared to $382 million in the fourth quarter of 2008. Earnings per share (EPS) in the fourth quarter of 2009 was $6.13 on 322 million diluted shares outstanding, compared to $1.21 in the fourth quarter of 2008 on 317 million diluted shares outstanding.

For the fourth quarter, Google said its owned sites generated revenues of $4.42 billion, or 66% of total revenues, representing a 16% increase over fourth quarter 2008 revenues of $3.81 billion. In terms of network revenues, or Google's partner sites, revenues generated through AdSense programs were $2.04 billion, or 31% of total revenues, in the fourth quarter of 2009, marking a 21% increase from fourth quarter 2008 network revenues of $1.69 billion.

Google's International Revenues, made up of revenues from outside of the United States, totaled $3.52 billion, representing 53% of total revenues in the fourth quarter of 2009, compared to 53% in the third quarter of 2009 and 50% in the fourth quarter of 2008. Revenues from the United Kingdom totaled $772 million, representing 12% of revenues in the fourth quarter of 2009, compared to 12% in the fourth quarter of 2008. Google said that in the fourth quarter of 2009, it recognized a benefit of $8 million to revenues through the foreign exchange risk management program, compared to $129 million in the fourth quarter of 2008.

Other highlights for Q4:
  • Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 13% over the fourth quarter of 2008 and increased approximately 9% over the third quarter of 2009.
  • Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 5% over the fourth quarter of 2008 and increased approximately 2% over the third quarter of 2009.
  • TAC - Traffic Acquisition Costs, the portion of revenues shared with Google's partners, increased to $1.72 billion in the fourth quarter of 2009, compared to TAC of $1.48 billion in the fourth quarter of 2008. TAC as a percentage of advertising revenues was 27% in the fourth quarter of 2009, compared to 27% in the fourth quarter of 2008. Google said the bulk of the TAC is made up of amounts ultimately paid to AdSense partners.
  • Other Cost of Revenues - Other cost of revenues, which is comprised primarily of data center operational expenses, amortization of intangible assets, content acquisition costs as well as credit card processing charges, decreased to $688 million, or 10% of revenues, in the fourth quarter of 2009, compared to $707 million, or 12% of revenues, in the fourth quarter of 2008.
  • Operating Expenses - Operating expenses, other than cost of revenues, were $1.78 billion in the fourth quarter of 2009, or 27% of revenues, compared to $1.65 billion in the fourth quarter of 2008, or 29% of revenues.
  • Google said its effective tax rate was 23% for the fourth quarter of 2009.
  • On a worldwide basis, Google employed 19,835 full-time employees as of December 31, 2009, up from 19,665 full-time employees as of September 30, 2009.
 

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