Google reports 23% Q3 year-over-year revenue increase

Google reported a 23% year-over-year increase in revenue to $7.3 billion in the third quarter.

Google-owned sites generated revenue of $4.83 billion, or 67% of total revenue, in Q3, This represents a 22% increase from last year’s third-quarter revenues of $3.96 billion.

Google’s partner sites generated revenue of $2.2 billion through AdSense programs, or 30% of total revenue in Q3. This was also a 22% increase from Q3 2009.

Google officials said the company is on pace to generate more than $1 billion in mobile advertising by the end of this fiscal year, and that revenue from display ads and YouTube is on pace to generate more than $2.5 billion in annual revenue, according to reports.

Google AdSense is a free program that allows online publishers to earn revenue by displaying ads on content such as search results, websites, mobile web pages and applications and RSS feeds.

Paid clicks, which include ad-related clicks served on Google sites and its AdSense partners, increased 16% over the third quarter of 2009. Average cost-per-click increased 3% from last year’s third quarter.  

Traffic acquisition costs (TAC), or the portion of revenues shared with Google’s partners, totaled $1.81 billion, or 26% of advertising revenues in Q3. This compares to TAC of $1.56 billion in the third quarter of 2009.

“Google had an excellent quarter,” said Eric Schmidt, CEO of Google, in an earnings statement. “Our core business grew very well, and our newer businesses — particularly display and mobile — continued to show significant momentum.”

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