Google reported revenue of US$3.21 billion in the quarter ending December 31, 2006, an increase of 67 percent over the same period in 2005. Google officials say they have been able to increase revenue while showing fewer advertisements per search.
Google has been limiting advertisements from queries that are not commercial in nature, while showing more ads on commercially oriented queries, Sergey Brin, Google's cofounder and president of technology, says. The result, on average, is fewer ads per query, he says. Healthy gains in traffic were the primary driver behind the company's increasing revenue, Google officials says.
Google's operating margin increased from 29.7 percent in the fourth quarter of 2005 to 33.1 percent in the fourth quarter of 2006. The operating margin was 34.6 percent in the third quarter of 2006.
Holiday shopping was the primary reason for the company's strong growth over the previous year's fourth quarter, officials says. The recently introduced Google Checkout system is now used by 20 percent of the web's top 500 retailers, Brin says.
Google has been opening new offices around the world, and the company's total number of full-time employees grew from 9,378 to 10,674 in the three months ending December. 31. Well over half of Google's traffic comes from outside the United States, and the search engine provides localized results in more than 55 countries, says Larry Page, cofounder and president of products.
Google has signed agreements with Apple, Samsung and China Mobile to provide services like Gmail on mobile devices. The search site's reach has been extended also by the purchase of YouTube, Page noted.
"We are working on integrating different types of results, video images, news, books and so on, all in one place," Page says.