Google Profit

Jan. 31 (Bloomberg) -- Google Inc., owner of the most popular Internet search engine, probably boosted fourth-quarter profit by attracting more Web queries and online advertising. Net income climbed 21 percent to $1.25 billion, or $3.91 a share, from $1.03 billion, or $3.29, a year earlier, according to the average estimate of 21 analysts surveyed by Bloomberg. Sales may have increased 55 percent to $3.45 billion, excluding revenue passed onto site partners, the survey showed. Google's share of the U.S. Internet search market rose to 56 percent in December from 51 percent at the end of 2006, while second-place Yahoo! Inc. lost ground, according to New York- based Nielsen Online. Google also drew advertising to its YouTube videos, mobile-phone services, and new multimedia promotions that broadcast live news and show movie previews. ``We're looking for Google to continue to gain share,'' said Jeff Donlon, managing director of technology research at Manning & Napier Advisors Inc., which oversees more than $18 billion in assets, including Google shares, in Fairport, New York. The rise in online advertising is a ``long-term story and we have a long way to go with it,'' he said. Excluding stock compensation, profit at Mountain View, California-based Google was $4.45 a share, analysts estimate. The company is scheduled to report results after the close of trading today. Google spokesman Jon Murchinson declined to comment. Initial Signs? Google, which had dropped 21 percent this year before today amid a slump in U.S. equities, fell $8.68 to $539.59 at 9:59 a.m. New York time on the Nasdaq Stock Market. The stock jumped 50 percent last year. Thirty-two of 36 analysts following Google advise buying the shares, while four have a ``hold'' rating, according to data compiled by Bloomberg. A slowing U.S. economy may curb Google's growth rate, said Clayton Moran, a Stanford Group Co. analyst. He reduced his Google rating to ``hold'' last week, citing concerns that consumers will shop less online. Rising energy costs and a housing slump dragged down consumer confidence to almost a two-year low in January, the Conference Board reported this week. ``That may be the initial sign that the consumer spending slowdown is going to impact search volumes, which impacts Google,'' Moran, based in Boca Raton, Florida, said last week. Following is a table of analysts' fourth-quarter estimates. All figures are in billions of dollars, except per-share figures, which are in dollars. Fourth-Quarter 2007 estimates Net income Per-share Sales Net Colin Gillis, Canaccord Adams $1.27 $4.00 $3.52 Rob Sanderson, American Technology $1.27 $3.97 $3.45 Youssef Squali, Jefferies $1.26 $3.97 $3.44 Jeffrey Lindsay, Bernstein $1.23 $3.85 $3.54 Sandeep Aggarwal, Oppenheimer $1.29 $4.06 $3.60 To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net