Google Q4 and Adsense earnings up

UK search market leader Google has released its well anticipated financial results for Q4 2008, and surprisingly, against a grim economic outlook, beat Wall Street's expectations.

Google turned in revenues of $5.70 billion (£4.1 billion) in the quarter, which was an impressive 18 per cent increase in profits over 2007 Q4.

Google CEO Eric Schmidt said in a release: "Search query growth was strong, revenues were up in most verticals, and we successfully contained costs."  However, Schmidt warned that the company could face tougher hurdles in Q1 of this year.

According to Marketing Pilgrim's Andy Beal, Schmidt said: "In some ways, the fourth quarter was the easy part... Now it's clear we're in recession. We don't know how long this period will last. We're certainly prepared to get through this (with) no problem."

Google has used the recession as a time to really focus on its core offering as Beal commented "As the recession crept up on us, Google reacted by announcing new innovations in search, a focus on its core products, and shuttering anything that was a distraction. To draw an analogy from the boxing world, Google is getting back to its fighting weight!"

Google's contextual advertising model Adsense also did well and generated nearly 1/3 of total revenues, and income from paid clicks increased by 18% cent.

Schmidt said that Google's focus will continue to remain on long-term goals, saying they will: "continue to invest in Google's core search and ads business as well as in strategic growth areas such as display, mobile and enterprise," despite current economic conditions.