Over the past few weeks, Google Inc. finally learned how to be social and wound up making millions of new friends with the launch of its Google+ social network project.
On Thursday, the Silicon Valley titan added a few more friends on Wall Street after blowing the doors off analyst expectations and posting record quarterly revenue, sending shares of the Mountain View, California company up more than 12% after hours.
Google+, the new social network launched on June 28 on an invitation-only basis, marks the search engine giant’s boldest move yet to add a social layer to its various online services and counter the rising dominance of rival Facebook Inc.
During a conference call on Thursday, Google co-founder and chief executive Larry Page said there are already more than 10 million Google+ users, who are sharing more than one billion pieces of content every day.
“I’m super excited about the amazing response to Google+ which lets you share just like in real life,” Mr. Page said in a statement.
While Google has launched social initiatives in the past, to varying degrees of success — including the failed Wave and Buzz projects — Google+ has so far received a largely positive reaction from users, which has helped push shares of Google up 10% since its launch in late June.
Although Google+’s membership numbers remain minuscule compared to Facebook’s 750-million-strong global user base, experts say Google+ may prove to be the strongest competitor yet to the world’s largest social network.
“The early warning sign for me that Google+ is worth looking at in a completely different light is when I watch 20-somethings start to flock to it,” said Sidney Eve Matrix, a media professor at Queen’s University in Kingston, Ont.
“It’s painful to reassemble your social network, and they are, and they’re going right for it … I think people are getting sick of Facebook and are looking for an alternative.”
Still, analysts say Google’s attempt to defeat Facebook in the battle to be the default starting point for users on the Web may have cost the company as much as US$200-million, and could have an impact on future profit growth.
Of course, Google+ isn’t the only Google service to enjoy experience tremendous growth. During a conference call with shareholders on Thursday, Mr. Page said the company is now activating 550,000 mobile devices powered by Google’s Android software every day.
“Android’s really on a tear,” he said.
Mr. Page also said there are now more than 160 million people using Google’s Chrome browser.
During a conference call to discuss his first quarter as chief executive since taking over from Eric Schmidt, Mr. Page said the company has increased the velocity of its execution thanks to a new, product-focused management structure.
In addition to growth in the company’s core search advertising business, Google chief financial officer Patrick Pichette said the company is also seeing growth in its mobile, YouTube and enterprise divisions.
For the three months ended June 30, 2011, Google said revenue was US$9.03-billion, a new quarterly record for the company. Wall Street analysts had expected Google to post revenue of US$6.5-billion. Minus traffic acquisition costs, Google’s revenue was US$6.9-billion.
Google’s revenue home run represents a 32% increase over the same quarter in 2010. Google said non-GAAP earnings for the second quarter were US$8.74 per share, ahead of analyst expectations of about US$7.86 per share.
Google said non-GAAP net income for the quarter was US$2.85-billion, up from US$2.08-billion in the same quarter a year ago.
Source: National Post
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