Google Seeing Windfall From Large Advertisers

Google ended 2009 on a high note, buoyed by aggressive retail ad spending in the fourth quarter and new investment by some of the world’s largest brands, executives said today during its Q4 earnings call.

Nikesh Arora, president of global sales and business development, said Google has seen “continued rising adoption of online advertising by larger companies.” He noted advertisers such as Volvo and American Express have embraced Google’s widening family of display ad products. In addition to its YouTube, DoubleClick, and AdSense display offerings, Google added several display capabilties during 2009, including its ad exchange platform and new creative optimization tools courtesy of its November acquisition of Teracent.

CEO Eric Schmidt called display advertising “the next huge business for us,” though he said other channels such as mobile may grow faster on a percentage basis because they’re smaller.

Google’s fourth quarter revenues surged 17 percent year over year to $6.7 billion, while net income was $1.97 billion on a GAAP (define) basis.

Aggregate paid clicks rose 13 percent compared to Q4 2008. Aggregate clicks include ads on both Google-owned sites and the sites of its content partners. Meanwhile, average cost-per-click, including both search and contextual ads, climbed 5 percent year over year.

On the subject of Google’s dramatic ultimatum to China last week, Schmidt noted the company continues to do business in the country and hopes to stay on there.

“We’ve made a strong statement that we’d like to remain in China,” he said. “We’d like to do so on somewhat different terms than we have, but we remain quite committed to being there.”

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