Google Earnings Call

Google has reported its Q1 2012 earnings and revenue is up 24 percent to $10.65bn (£6.68bn) compared to the same period in 2011.

However the figure is not as good as it might seem, becasue when traffic acquisition costs (TAC) are taken into account, revenue is just $8.1bn which is slighly down compared to the same figure for 2011. TACs are payments made by Internet search companies to affiliates and online firms that direct consumer and business traffic to their websites and represented 25 percent of ad revenue for Google in Q1 2012.

Net income was up from $1.8bn in Q1 2011 to $2.9bn in the first three months of 2012.

"Google had another great quarter with revenues up 24 percent year-on-year," said Larry Page, CEO of Google, who was celebrating his first year back in charge of the search giant.

"We also saw tremendous momentum from the big bets we've made in products like Android, Chrome and YouTube. We are still at the very early stages of what technology can do to improve people's lives and we have enormous opportunities ahead. It is a very exciting time to be at Google."

The company also announced a new 2-for-1 stock structure, revealing that the Board of Directors unanimously "approved a stock dividend proposal designed to preserve the corporate structure that has allowed Google to remain focused on the long term."

On his Google+ page, Larry Page gave some more detail on the new type of stock, or Type C stock, which won't have any voting rights.

"Today we announced plans to create a new class of non-voting capital stock, which will be listed on NASDAQ. These shares will be distributed via a stock dividend to all existing stockholders: the owner of each existing share will receive one new share of the non-voting stock, giving investors twice the number of shares they had before. It's effectively a two-for-one stock split - something many of our investors have long asked us for. These non-voting shares will be available for corporate uses, like equity-based employee compensation, that might otherwise dilute our governance structure."

This would lead to many wondering if the company was planning to make another big Motorola-like acquisition, but Page said this was not the case: "We don't have an unusually big acquisition planned, in case you were wondering."

Google-owned sites generated revenues of $7.31bn, or 69 percent of total revenues, in the first quarter of 2012. This represents a 24 percent increase over first quarter 2011 revenues of $5.88bn. Google's partner sites generated revenues of $2.91bn, or 27 percent of total revenues, in the first quarter of 2012. This represents a 20 percent increase from first quarter 2011 network revenues of $2.43bn.

In terms of where Google is making the most money, revenue from outsdie its home territory of the United States represented 54 percent of the revenue, up from 53 percent in 2011. In the UK, revenues totaled $1.15bn, representing 11 percent of revenues in the first quarter of 2012, which is identical to 12 months previously.

One area where many investors were eagerly looking at was the Cost Per Click (CPC) which includes clicks related to ads served on Google sites and the sites of our Network members. This was down approximately 12 percent, which was more than expected by analysts.