Google's Q1: Search Holds Steady While Network Revenues Slip

  |  April 16, 2009   |  Comments

AdSense suffers a year-over-year revenue decline, but the company's core product continues to grow.

Google's ad network business was roughed up by the recession last quarter, but search advertising is holding steady.

Reporting its Q1 earnings today, Google said ad revenues generated by its AdSense network of Web site partners totaled $1.64 billion, a 3 percent drop compared to the year-ago period. AdSense also represents a smaller chunk of the company's business -- 30 percent for the quarter just ended compared to 33 percent in Q1 2008.

Meanwhile ad performance held up on Google.com and the company's other in-house properties. Google site revenues were $3.7 billion, representing a 9 percent annual growth rate.

Notably, Google experienced its first sequential revenue declines during Q1. It reported total revenues of $5.5 billion for the quarter, representing a quarter-to-quarter loss of 3 percent. The annual growth rate was 6 percent.

"These results underline both the resilience of our business model and the ongoing potential of the Web as users and advertisers shift online," said CEO Eric Schmidt in a statement.

Google reported earnings per share of $4.51 on net income of $1.4 billion. The company's headcount at the end of the first quarter was 20,164, down slightly from 20,222 at the end of Q4 owing to natural attrition and the company's first-ever layoffs.

Additionally, the company announced its global sales chief, Omid Kordestani, will take on a new role as senior advisor to Eric Schmidt and Google's founders. He'll be replaced by Nikesh Arora, currently President of International Operations. Arora's new title is president of global sales operations and business development.

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ABOUT THE AUTHOR

Zachary Rodgers

Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects. 

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