Google To Tighten it's Purse Strings

Google’s second quarter earnings have disappointed investors and lower than expected profits have led to a drop in share prices for the search engine giant.

This might appear to be bad news for Google but on closer inspection things are not quite as bad as they seem. The company’s revenue still rose by 58% to £1.88 billion and its profits also increased, but by a much smaller rate of 28% to 450 million.

When you consider the fact that Google has been very busy with its cheque book in the last few months, we can then start to see why their earnings are slightly down. It has made eight purchases so far this year with the most notorious being the acquisition of DoubleClick for £1.5 billion. It has also been focusing on recruitment and has increased its staff levels by 74% in the last 12 months to almost 14,000. The new staff will be tasked with developing new products as Google enters into new markets.

Google’s CEO Eric Schmidt has said,
"We remain focused on addressing the tremendous opportunities we see worldwide, adding the talent and building the infrastructure that will allow us to continue to provide rich user experiences to Google users around the world."

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