SAN FRANCISCO - Google Inc. reported its first-ever drop in quarterly profit Thursday, but the Internet search leader is still weathering the economic storm better than analysts anticipated.
Although earnings drop, Google beats estimates
January 23, 2009 at 5:43AM
The fourth-quarter results indicated Mountain View, Calif.-based Google was able to rein in its free-spending ways enough to offset a slowdown in the online ad market that generates most of Google's revenue.
Even so, there were signs the 13-month-old recession is starting to bear down. The downturn forced Google to write down $1.1 billion of the combined $1.5 billion that it has invested in two troubled companies, AOL and Clearwire Corp. And Google is allowing its 20,222 employees to swap their outstanding stock options for new ones that will carry a lower exercise price, giving the workers a better chance of making money from the options.
Google made $382 million, or $1.21 per share, in the three months ending in December. That was a 68 percent drop from the same period in 2007. Google's profit had climbed by at least 17 percent in its previous 17 quarters as a public company. Revenue climbed 18 percent to $5.7 billion. That marked the first time Google's revenue growth had fallen below 30 percent from the previous year.
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Health care spending rose by 15%, driven by higher prices. Officials say solutions are needed to prevent Minnesotans from being priced out or delaying care they need.
