It reported 3 month revenues of £6.8 billion ($10.6billion) and its net profit rose 6.4% to £1.74 billion ($2.7 billion).

“Google had a really strong quarter ending a great year,” said chief executive Larry Page.

“I am super excited about the growth of Android, Gmail, and Google+, which now has 90 million users globally – well over double what I announced just three months ago.”

But analysts were less impressed with Google’s figures.

Expectations were very high and Google have missed thier estimates.

The number of clicks on Google’s AdWords Pay Per Click networks rose significantly in the fourth quarter, but the amount that Google was able to charge advertisers for each click fell 8%.

For the full year, Google reported a 29% rise in revenue to £24.45 billion ($37.9 billion), with net profits up 14% to £6.25 billion ($9.7 billion).

Earlier this year, Google launched Google+, a social network to take on Facebook.

“People are flocking into Google+ at an incredible rate,” claimed Google head Larry Page.

The profits were well ahead of market expectations, and shares in the company rose 6% in trading after the market closed.

This is the fourth successive quarter that the company has increased it’s sales income.

Sales revenue rose 33% to £6.48 billion ($9.72 billion) – just shy of having a quarterly turnover of $10 billion.

Mr larry Page said “We had a great quarter,” he said. “Google+ is now open to everyone and we just passed the 40 million user mark.”

Facebook by comparison has around 800 million users.

As well as generating money through advertising based on search, Google also makes the increasinly popular Android mobile phone operating system.

After testing in Brazil, Spain, and Portugal, Google will roll out a new algorithm globally that gives more weight to landing page quality when it comes to AdWords Quality Score.

“What we’ve seen is that there are ads available in the auction that are as good a quality as the top ads. But the landing pages — the merchant sites, the advertiser landing pages — are of much higher quality than the ads that we see at the top of our auction,” Jonathan Alferness, director of product management on Google’s ad quality team.

This, says Alferness, means the user experience isn’t what it could be. Hence the change to give more weight to landing page quality. “In the end, we believe that this will result in better quality experience for the users.”

Landing page quality has long been a factor in Google AdWords, but more as a negative signal.

If an advertiser’s landing page was particularly terrible or misleading, advertisers could have their ads rejected or their accounts suspended or revoked — depending on how bad the policy violation was.

The new change will assign landing page quality a positive value, incentivising advertisers to make sure the landing page’s keywords and content are closely aligned with the keywords for which they’re bidding.

Ads with high landing page quality will get a “strong boost” upward in the auction, according to Alferness.

Alferness says Google will crawl the landing pages associated with every ad and make a determination as to its quality.

“What we always ask our advertisers to focus on is relevance — choose a landing page or site experience that is both relevant to the keywords that you’re targeting and also a good experience for end users,” said Alferness. “This is just continuing to push on those best practices. I gives us the ability to really reward those advertisers that have been doing this, whose landing pages really are some of the best in our systems.”

The change will roll out in the next week or two. Advertisers may see some variations in ad position and keyword Quality Score at first, but things should settle down within a couple of weeks, according to Google.

From: http://searchengineland.com/google-tweaks-adwords-to-give-landing-page-quality-more-weight

Net income at the world’s biggest software maker jumped 23% to 23.15bn for the year.

The figures, which beat forecasts, showed final quarter revenues reached a record high of £10.85 billion, leading to profits of £3.73 billion,  boosted chiefly by sales of Office, Xbox and server software behind Microsoft’s push into cloud computing.

Microsoft’s business division, which sells the Office suite of programs, including Outlook, SharePoint and Excel, was the company’s biggest seller in the quarter, increasing sales by 7% to £3.65 billion.

The company’s online services unit, which runs the Bing search engine and MSN internet portal, increased sales by 16.5% to £ 413 milion, but saw losses increase to £455 million as it struggles to fight competitor Google.

One weaker spot was sales of its widely-used Windows product, which are slowing as tablet PC sales eat into demand for traditional PCs.

Microsoft is itself expected to enter the tablet market next year with the launch of its next operating system, code-named Windows 8, which will be compatible with the low-power chips commonly used by tablet and mobile phone makers.

Microsoft’s share price (MSFT) at around $27 is still some way off it’s record of $37.06 which was posted on 29 October 2007.

The results have come as Yahoo has been facing increasing competition from rivals Google and Facebook.

However, despite a drop in revenue, Yahoo said its profits rose by 11% from a year ago to £148 million.

Carol Bartz, the chief executive of Yahoo said the second quarter was a “mix of good, encouraging and, at the same time, unsatisfactory” developments.  The issue was we did not have enough sales people in front of the big clients,” she said.

Increased competition from its rivals is the not the only issue that Yahoo has had to deal with.

In May, it suffered a big setback in China after the internet company Alibaba, in which Yahoo has a 43% stake, transferred one its key assets, Alipay, to a company controlled by its founder Jack Ma.

Yahoo shares have fallen more than 20% since then because investors are worried that it may have lost out on one of Alibaba’s key businesses.

The company has assured its backers that it is trying to resolve the issue.

“We have been working on this negotiation continuously, in fact daily,” said Ms Bartz.

However, analysts said the latest data indicated that Yahoo will find it tough to turn things around soon.

Google shares fell 5% in New York last night after Wall Street worried about a sharp rise in expenses at the world’s leading search engine-, which Larry Page took the helm a fortnight ago.

Revenue in the quarter climbed to £4.09 billion- beating market expectations.

Mr Page, who co-founded Google 13 years ago with Sergey Brin at Stanford University in California, has indicated he will accelerate spending on research and staff in an effort to tackle the challenge posed by rivals such as Facebook and Apple.

Google, which had a workforce of 26,316 at the end of the first quarter, said it would be adding 6,000 employees this year and raising the salaries for non-executives by 10pc as the battle for talent in Silicon Valley heats up.

Dr Search points out that the jump in Google’s staffing costs should not have come as any surprise as Googler Matt Cutts- who is regarded as the unofficial search engine mouthpiece had mentioned in his blog on 4 th April Google search quality is hiring

Wall Street analysts apparently expect Mr Page to turn his focus to new areas of growth such ad mobile ads and social networking, rather than focusing on short-term profit margins- which the Search Clinic told you about a few days ago: Google’s staff future bonuses depend on social media success

With total UK advertising spend in 2010 valued at £16.6 billion, this takes the internet’s market share to a record high of 25% (23% in 2009), meaning that £1 in every £4 invested by advertisers is spent online.

These findings demonstrate that, despite the recession, online advertising is in rude health.

Significantly, marketers are increasingly using online channels to drive their brand building campaigns. Consumer goods and retail advertisers increased their investment in online to become two of the top four big spenders in display, capitalising on the medium’s core strengths of reach and engagement as well as accountability.

In 2010 the biggest gain was display advertising, thanks to a nearly 200% surge in display advertising in a social media environment (on a like-for-like basis)* and 91% year-on-year (absolute growth) in video formats. Expenditure on pre-, mid- and post-roll video advertising nearly doubled to £54 million (£28 million in 2009). Overall display grew by more than a quarter (27.5%) on a like-for-like basis to a new high of £945.1 million, representing 23% of total online spend (up from 20% in 2009).

Consumer goods manufacturers became a top three display spender in the first half of 2010 with 12% share, jumping to 13% in the second half. The top spender in online display is finance with 15.2% share, indicating that as the economy recovers, finance brands are seeing their marketing budgets re-emerge. Finance market share has overtaken entertainment and media, which has dipped slightly to a 14% market share.

Paid-search continues to perform strongly with growth of 8% year-on-year on a like-for-like basis to £2,346 million, representing 57% of total online spend (61% in 2009).

Mobile advertising has experienced a staggering 116% year on year growth (on a like for like basis), up from 32% in 2009. Advertisers spent £83 million on mobile advertising in 2010, led by the entertainment and media sector, but with encouraging growth from finance, telecoms and consumer goods advertising.

The UK is still glued to social media– Social networks now account for 25% of the time spent online in the UK. This is reflected in the growth of display advertising spend as brands are able to tap into the social nature of the web.

The research is published at http://www.iabuk.net/en/1/adspendbreaks4billionmilestone280311.mxs

Just like Google has been dominating the online search share market in the UK with 90% marketing share, the majority (97%) of mobile search spend goes to Google, with Bing and Yahoo getting meager parts of the remaining 3.2 percent.

This report also confirms Google CEO Eric Schmidt’s recent statement at an IAB event Florida where he said “mobile is growing faster than expected and blowing all of his company’s internal projections out of the water”.

About 15% of the total search volume for all of Google’s search categories comes from mobile searches.

It’s not all good news for mobile search advertisers though.

The data from the report highlights higher a Cost per Click (CPC) and lower Click Through Rate (CTR) for mobile search campaigns- with 13% higher CPC and 30% lower CTR than traditional paid search campaigns.

What’s interesting to note is the significant influence Apple has over Google’s mobile search success.

Google dominates (around 95%) all the searches originating from the iPhone however 50% of these searches come from the toolbar (at the bottom of your iPhone main screen), 42% from Google’s homepage and less than 10% from Google’s app.

What might happen for example if either Bing or Yahoo! were to become the default search engine for the iPhone. Google’s share would be significantly impacted.

The report can be found at: http://blog.efrontier.com/mobile-search-user-behavior-is-changing-rapidly-and-marketing-opportunities-abound-

Online searching has become a nearly ubiquitous online activity and Google remains the undisputed king—receiving the largest share of search ad revenue and traffic.

But an eye-tracking study by user experience research firm User Centric adds a new perspective.

Its research indicates that most search users overlook search ads almost entirely.

The findings showed organic search results were viewed 100% of the time, and participants spent an average of 14.7 and 10.7 seconds looking at organic search results on Google and Bing, respectively.

However, only 28% of participants looked at right side ads on Google, and just 21% did the same on Bing—spending around 1 second viewing all ads combined on each search engine.

To put this in perspective, searchers who viewed the left hand site navigation spent more time doing so than they did viewing ads on both search engines.
Viewing Metrics for Search Results on Google and Bing, July-Aug 2010 (% of participants and time spent (seconds))

With users spending nearly all their time viewing organic search results, Hitwise’s latest numbers give some further insight.

Bing and Yahoo!’s success rates, meaning searches that resulted in a click, are just over 81% whereas Google sits much lower at 65.6% in December 2010 and January 2011.
Although the sheer volume of searches Google handles may bring down its success rate, the difference been Google and Bing is still large enough to draw conclusions.

First, users were shown to spend the vast majority of their time looking at organic search results on both search engines, and Bing’s success rate is 16 percentage points higher than Google’s.

Therefore, even though Google has more traffic than Bing, the Microsoft search engine generates a greater share of relevant traffic per search.

Additionally, this data indicates that SEO is more essential than ever. Users have learned to overlook search ads, and they will continue to ignore such ads as they become even more search-savvy over time.

SEO will become increasingly challenging as users start to rely on search engines for different reasons.

A recent study from Forrester Research found that internet users were 22 percentage points less likely in 2010 to rely on search engines to find websites than they were in 2004.

Although this doesn’t mean people are using search engines less to find information about product types or branded goods, it does mean that they are relying on search less to find websites specifically.
Perhaps this change is because internet users are becoming more knowledgeable and do not need to rely on search to find popular sites such as Facebook and YouTube.

Also, they may be relying on social media more to find websites. No matter the reason, this data indicates that search users’ behavior is in constant flux.

As search users continue to change their behavior, marketers will need to adjust their SEO strategy to keep up.

This research was initially published on: http://www.emarketer.com/Article.aspx?R=1008270&AspxAutoDetectCookieSupport=1

Google said Mr Schmidt would focus on “deals, partnerships, customers and broader business relationships”.

The surprise news came as Google unveiled strong net profits in the last three months of £1.6 billion on revenues of £5.25 billion.

Mr Page, 37, is reclaiming the job he relinquished to Mr Schmidt, 55, when investors called for a more experienced business leader.

“In my clear opinion, Larry is ready to lead and I’m excited about working with both him and Sergey Brin for a long time to come,” Mr Schmidt said in a blog posting. Mr Brin, also 37, is Google’s other founder.

Schmidt was brought in as the “adult” to complement the search company’s young leadership team. He had plenty of experience: at Bell Labs, Xerox, Sun and Novell.

His biggest achievement is how he bonded with Google’s two founders; as an executive triumvirate they appear to have managed the company with little internal friction.

In corporate terms, Larry Page and Sergey Brin have been grown-ups for quite a while. Now they are taking charge at the company that is rightfully theirs.

But Google has lost momentum recently, especially in competition with Facebook. Key staff are leaving. It will be Larry Page’s job to re-energise the search giant.

Still, shareholders will feel a tad safer in the knowledge that Eric Schmidt will carry on as the founders’ mentor.

Mr Schmidt said the management changes, which take effect on 4 April, were part of a plan to “streamline” decision making and create clearer lines of responsibility and accountability.

“We’ve been talking about how best to simplify our management structure and speed up decision making for a long time,” Mr Schmidt said.

He added: “Larry will now lead product development and technology strategy, his greatest strengths… Sergey has decided to devote his time and energy to strategic projects, in particular working on new products. His title will be co-founder.”

The managerial news overshadowed strong fourth-quarter profits that were well ahead of analysts’ estimates. The $2.54bn profit compares with $1.97bn made in the same quarter the year before.

Analysts said Google appeared to have strengthened its internet advertising machine during the pre-Christmas shopping season, sparking a 26% surge in revenues to $8.44bn. After subtracting the commissions Google pays to advertising partners, revenues were $6.37bn, about $300m more than analysts had forecast.

Shares of Google rose about 2% to $639 in after-hours trading on Wall Street. The company now has a market value of about $200bn and has turned the co-founders and Mr Schmidt into multi billionaires.