Google Inc. reeled in more Internet advertising during the holiday shopping season and approached $2 billion in quarterly profit for the first time, providing the strongest sign yet that the online search leader has shaken off the recession’s doldrums.
The fourth-quarter earnings announced Thursday topped analyst estimates, but revenue only matched forecasts.
Investors initially reacted with disappointment, but seemed to reconsider as they had more time to digest the results. By late Thursday, the company’s shares were only 40 cents below their closing price of $582.98 after initially sagging by as much as $33.98, or nearly 6 percent, in extended trading.
Google made $1.97 billion, or $6.13 per share, in the final three months of 2009. That was up dramatically from income of $382 million at the same time in 2008, when Google’s earnings were deflated by charges to reflect the eroding value of some investments.
Fourth-quarter revenue totaled $6.7 billion, a 17 percent increase. The revenue was also up by more than 10 percent from the previous quarter, the first time Google’s sequential growth has climbed by double digits since the U.S. recession began in December 2007.
“Given that the global economy is still in the early days of recovery, this was an extraordinary end to the year,” said Eric Schmidt, Google’s chief executive.
The quickening growth pace indicates Google is regaining the pre-recession stride that enabled the company to consistently increase its quarterly revenue by at least 30 percent. Google is so large now that it will be difficult to get back to that level, but analysts still think revenue could rise by nearly 20 percent this year — up from 9 percent for all of 2009.
The brightening outlook has encouraged Google to loosen its pursestrings to hire more employees, make more acquisitions and mine new business opportunities such as mobile phones. Investors aren’t…