Google Revenue Climbs But Misses Analyst Predictions

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Google reported fourth-quarter revenue of $1.9 billion yesterday, up 86 percent from the previous year. However, its earnings came in at $1.54 per share, far less than the $1.76 a share average estimate of analysts surveyed by Thomson First Call.


Revenue was split almost 60-40 between Google and its partner sites. Google-owned sites generated revenue of $1.1 billion, or 57 percent of total revenue -- a 24 percent increase over Q3 revenue of $885 million.


Google's partner sites generated revenue, through AdSense programs, of $799 million, or 42 percent of total revenue -- an 18 percent increase over network revenue of $675 million generated in the third quarter.


For the year ended Dec. 31, 2005, Google reported revenue of $6.1 billion, an increase of 92.5 percent over 2004 revenue of $3.2 billion. Revenue growth was attributable to both Google sites and Google network sites, the company said.


Google's share price fell as much as 19 percent in after-hour trading yesterday.


"We generated significant revenue growth in our core search and advertising business, driven by continued strength in traffic and monetization," Google CEO Eric Schmidt said in a statement. "We will continue to invest significantly as we develop innovative new products and as we extend our core technologies to new user access points and to different channels."


Also yesterday, shares of online music site Napster jumped 25 percent after published reports that Google was in talks to acquire the once-controversial site. Digital Music News and the New York Post said the companies were in negotiations. Google denied the rumor. Nevertheless, Napster's stock rose from $3.12 on Monday to $4.95 on Tuesday before settling back to close at $3.91.


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