Google increased turnover by 27% in the final quarter of 2011 to $10.6bn and net profits lifted by 6.4% to $2.7bn, but this was not enough to its share price tumbling 10% as the results fell short of investor expectations.
Expectations had been higher but the chief executive of Google Larry Page defended the results, saying: “Google had a really strong quarter ending a great year. I am super excited about the growth of Android, Gmail, and Google+, which now has 90 million users globally – well over double what I announced just three months ago.”
Google has been realigning its business to make the search engine giant produce more “personal results” via its social network.
Revenue from Google’s search adverts increased sharply in the fourth quarter but the amount charged by Goggle to advertisers fell by eight per cent per click.
Microsoft profits drop
Meanwhile, Google’s great rival, Microsoft posted its second quarter results for 2011 and despite a slight drop in profits, Microsoft saw its share price rise moderately, mainly because expectations had been lower. The software firm made $6.624 billion in the period, compared to $6.634 billion in the same period a year previously.
Turnover increased to $20.89 billion, a rise of five per cent. Microsoft saw an uplift in revenue at its xbox 360, server and online divisions but saw a slight fall in revenue at its Windows operating system division. Tighter control of costs and improvement in figures for its Bing search engine aided the figures.
Shares in Microsoft went up by 2.1 per cent after the announcement of its results. This was better than most analyst expectations who thought that the increased competition from the growth of tablet computers such as Apple’s iPad would lower PC and software sales.
Wall Street welcomed the figures, with Microsoft’s shares rising 2.1% in after-hours trading.
Microsoft chief executive Steve Ballmer said in a statement: “We delivered solid financial results, even as we prepare for a launch year that will accelerate many of our key products and services.”
