Google Q1 2011: Revenue Up, Earnings Fall Short

Google has declared its financial results for Q1 2011. According to the financial results, the overall revenues increased by 27% but earnings fell short of Wall Street estimates.

Google generated $8.58 billion in revenues, 27% increase from last year first quarter $6.78 billion. Around 69% of the revenue is generated from Google owned websites, remaining came from Adsense.

The major sources of revenue are still International contributing 53% of the total revenue which is almost the same to the International revenue (52%) in Q1 2010.

Google Search profit has also increased. Google earned an operating profit of $2.8 billion, a 15% increase from its Q1 2010 earnings ($2.49 billion). That translates to an income of $8.08 per share. While that’s an increase from last year, Wall Street estimates had it at $8.12 per share.

As a result, shares of Google stock are currently down in after-hours trading. At the time of writing, Google shares were down 30.94 points to 547.57, a decline of 5.35%.

Why did the earning fell short? There are bunch of reasons, the cost for marketing, hiring and R&D has increased. Another reason is acquisitions of many other companies which is not at all a bad way of spending money. Research and development spending shot up by 50% to $1.23 billion, marketing costs skyrocketed by 69% to $1.03 billion, and stock-based compensation expenses rose by 48% to $432 million. Those giant bonuses last year are taking their toll on the company’s bottom line.

According to Google it had 26,316 full-time employees as of March 31, up from 24,400 employees at the end of last year.

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