Google’s Q1 revenue grows by 63%; Yahoo up 7%

Google reported revenue of $3.66 billion in the first quarter of 2007, up 63% from the first three months of 2006 and 14% from the fourth quarter of 2006. Net income for the first quarter was $1 billion, down from $1.03 billion in the fourth quarter. Excluding stock-based compensation and certain tax benefits in the fourth quarter, the company said its operating income for the first quarter would have been $1.41 billion, compared with $1.20 billion in the fourth quarter.

Google-owned sites generated $2.28 billion in revenue, or 62% of the first-quarter total. That represents an increase of 76% over revenue of $1.30 billion in the first quarter of 2006, and of 15% over $1.98 billion in the fourth quarter. Through the AdSense programs, Google partner sites generated revenue of $1.35 billion in the first quarter, up 45% over $928 million in the year-ago quarter and of 12% over the fourth quarter. Paid clicks, including on Google sites and those of AdSense partners, increased 52% over the first quarter of 2006 and by 13% over the fourth quarter, Google reported.

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Nielsen/NetRatings says Google’s web traffic grew 20% to 111.7 million unique visitors in the first three months of this year compared with 93 million in the first quarter of 2006. Searches on Google were up 40% to 3.6 billion, Nielsen/Net Ratings says, while competitor Yahoo had 1.3 billion searches, up 12%, and MSN 618 million, up 9%.

Shares in Google were up 3% in after-hours trading Thursday as Wall Street responded favorably to Google’s report.

It was a different story for Yahoo whose shares dropped by more than 10% this week after it reported earnings that investors viewed as disappointing.

Yahoo reported first-quarter revenue of $1.67 billion, up 7% from $1.57 billion in the first quarter of 2006. Marketing services revenue for the 2007 quarter was $1.47 billion, an increase of 6% over $1.38 billion a year earlier. Operating income, however, was $169 million, down 16% from $201 million in the first quarter of 2006. Yahoo said operating income before depreciation, amortization and stock-based compensation was $460 million, up 6% from $435 million in the year-ago quarter.