Google's CEO, Eric Schmidt, has put the strong sales figure down to Google's continued focus on innovation, while the Chief Financial Officer has said that, "Growth in both traffic and monetization contributed to our performance this quarter," with increases in ad sales and the number of new advertising customers providing strong boosts to revenue streams.
Looking towards the future, Google has announced plans to do "aggressive hiring and strategic distribution deals" in the third quarter, along with sizable continued data centre investment. Google is now looking to build and buy data centres and real estate rather than lease, he stated. "Margins may decline as we continue to invest in the business."
However George Reyes - Google's Chief Financial Officer - said the view at Google is that, "Realistically, we think we can't put too much capital expenditure into the system. It's a really critical part of our competitive advantage and our infrastructure. It's something that you're going to continue to see quite substantial investment going forward over the next few quarters."
Market analysts appear to be happy with Google's recent plans and strong results, and believe that the search market is currently proving robust, as Google increases its market share through its future investments and solid marketing plans.
Yahoo! also posted their figures for the second-quarter last week which showed net income meeting analyst expectations, with revenue falling just slightly short. Share values, however, dropped following announcements that it was delaying the release of a new advertising platform intended to help Yahoo! compete against Google. These plans have been put back to the first quarter of next year in order to allow for additional testing and feedback.
Whilst Google continues to dominate, Yahoo! has seen some useful gains, with traffic to Yahoo! sites rising by 9% last quarter, and the number of unique users rising by a huge 28% compared with a year ago. With spending in the US on online-advertising expected to increase by over 33% compared with last year, reaching a unprecedented $16.7 billion, Yahoo! has predicted that its third-quarter expected revenue will be in the region of between $1.1 billion and $1.2 billion.
Google continues to lead the way as the most popular search engine, with an overall 45% share of the overall market followed by Yahoo! at 20%. Google's 54% share of the $6.4 billion paid search industry compared with the 20% owned by Yahoo! means that big plans are still needed by Yahoo! if it is to close the gap on its main rival.
