Profits Found

Sourced from SearchDay

Earnings reports from Yahoo! and Google highlight the resurgence of online advertising.

Yahoo!’s first-quarter profits doubled in the first quarter, jumping to $205 million from $101 million a year ago, as revenue zoomed 55% to $1.17 billion.

Powerful as the results were, Google’s were even more impressive. Revenue doubled to $1.26 billion, and profit jumped to $369 million from $64 million a year ago. Much of this revenue growth came as a result of users clicking on the ads that appear on a search results page based on the keywords entered. Every time a user clicks on an ad, advertisers pay Google.

Google’s shares soared on Friday, a day after the earnings were released, reaching the highest levels of their brief history. The shares of Yahoo! also finished the week with a gain, albeit a more modest one, after posting results on Tuesday. Its shares are below the recent highs reached in late 2004.

Google is the top search engine by a large margin, allowing it to attract more advertisers and collect more ad dollars.

Google also kept users interested in the site by introducing a number of new features like a separate Web search for video content, a desktop search application and a satellite map search feature.

There is some concern that Google’s profits are built on a single revenue stream. The company has talked recently of adding more graphical ads, such as the ones that appear on Yahoo!, to address this issue.