Google’s International Financial Performance Reveals 44% Growth

Google’s recent Quarter 3 2011 financial performance announcements saw a delighted Larry Page extolling the performance of the business, with 33% annual growth compared with the same quarter in 2010. He said the word that sprang to mind for the quarter was “gangbusters.” The income for the quarter was almost $10 billion.

Where is this revenue coming from?

I’ve been tracking Google’s figures and breaking out the role of the international world since Google started revealing those figures a few years ago.

For the first time in this quarter’s release, Google revealed more information about mobile, saying it represented an annual run rate of $2.5 billion. It’s a little odd that more detail isn’t given about a sector Google believes is critical.

Wow, ‘Even The UK’ Is Performing Better!

The international growth figures are always somewhat masked by the poorer growth rates in the U.S. and especially the U.K. For Google, the U.K. has performed relatively poorly for a couple of years now, largely related to the state of the U.K. economy. This time, CFO Patrick Pichette revealingly said, “Even the U.K. continues to show some positive momentum.” Note that word “even”!

When you analyse the figures, you discover that, ignoring currency hedging, the U.S. grew “only” at an annual rate of 24% compared with 2010. Obviously, that’s still a pretty good performance.

But what is truly outstanding is Google’s international performance which, as you can see in the chart below, reached the heady figure of 44% annual growth — nearly 20% faster than the U.S. As the chart shows, this rate has actually been accelerating over the past three quarters.

Perhaps this helps to explain why, with SMX’s help, we have been promoting the InternationalSearchSummit and stressing the opportunities internationally for U.S. businesses.

Google Q3 Growth Internationally Compared To The US And UK

Google Q3 Growth Internationally Compared To The U.S. And U.K.

In the call the Google team did with its analysts (you can follow as a webcast here), sales chief Nikesh Arora highlighted a number of countries where strong performance had been seen: Canada, Spain, Japan, Australia, India and Brazil. Australia, India and Brazil are certainly among the world’s better performing economies.

The performance in Japan will have improved significantly as a result of the deal to power Yahoo Japan, which will have lifted Google virtually overnight from seeing less than half of the search queries in Japan to seeing most of them.

Google HeadCount V Revenues

Google HeadCount V Revenues

As you can see above, the headcount has continued to grow, maintaining roughly a similar percentage of cost as it did last quarter.

In April, Google announced (FT.com) that it was expecting to see a surge of 80% from its operations in Brazil, with Google’s Brazilian business generating at least $500 million. This is partly why Google has been expanding its workforce significantly in Brazil, with increases of as much as 50% estimated by some for that market.

One aspect of Google’s international performance has been changes in the way its Quality Score works, with tests having been run in markets such as Spain. The chart below shows the growth rates of both cost-per-click and the number of clicks compared with previous quarters.

These figures are difficult to read due to the fact that Google has never given a baseline figure to base them on, but it looks like the average cost of a click has gone down significantly, whilst the volume has gone up.

Google CPC Values Over Time

Google CPC Values Over Time

There has certainly been no change in the continuing investment in marketing as mentioned in this column previously. However, intriguingly, markets such as China and Russia were not mentioned in the call as contributing to performance, which correlates with statements from companies such as Yandex that more than 80% of advertising revenue is theirs.

The Larry Page Effect

The Larry Page Effect

However you look at the figures, Google’s performance internationally is breathtaking — it would just be useful and more transparent from Mr. Page to give more information on a market-by-market basis. I’m surprised Google is not under more pressure from shareholders to reveal these figures too!

Opinions expressed in the article are those of the guest author and not necessarily Search Engine Land.

Related Topics: Channel: SEO | Multinational Search

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About The Author: is a linguist who has been specializing in international search since 1997 and is the CEO of WebCertain, the multilingual search agency and Editor-in-Chief of the blog Multilingual-Search.com. You can follow him on Twitter here @andyatkinskruge.

Connect with the author via: Email | Twitter | Google+ | LinkedIn



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