Google posts 35% revenue gain; headcount swells via money-losing Motorola unit

Google posted revenues of $12.21 billion during the second quarter, a 35 percent increase over the same period last year. The search company’s net income grew to $2.79 billion, up from $2.51 billion.

The results mark the first time that Google has included the performance of Motorola, the mobile phone maker that Google acquired for $12.5 billion in May. As a result of the Motorola purchase, Google now employs 54,604 full-time employees (34,311 the Google business and 20,293 in the Motorola business). That compares to 33,077 full-time employees at the company at the end of March.

Even with the big acquisition of Motorola, Google still is sitting on a big pile of cash and cash equivalents of $43.1 billion. Google Chief Financial Officer Patrick Pichette said that the cash position is a “strategic asset” that will allow it to pounce on new opportunities in the hot technology sector.

But Motorola is losing money, chalking up an operating loss of $233 million on revenue of $1.25 billion during the period tracked. The New York Times cited analysts who called the Motorola results “frightening” and “ugly,” noting that  Google’s “blossoming mobile strategy makes it even harder to tell the difference among the big technology companies.”

Shares of the company jumped more than three percent in after hours trading following the release of the report.

Nikesh Arora, senior vice president and chief business officer at Google, cited the strength of the company’s DoubleClick display ad platform and YouTube, which he noted once was written off by some as a technology in search of a business model.

“I think we can declare that we’ve found our model,” said Arora, adding that it is a “proven winner” in online video. In the enterprise arena, Arora said that more than five million businesses are now using the company’s cloud business offers, an area that he said will be a “growth engine” for Google going forward.

“We’ve gone from upstart to upper crust,” Arora said in today’s earnings call in reference to the enterprise business. Arora added that mobile advertising no stands where search did in 1999, adding that they believe it will “follow the trajectory that search has.”

In terms of Motorola, Google’s Pichette said there is a “palpable excitement” about the business. He added that there is a “lot of accounting noise” in the data because of the complexities related to the acquisition, adding that the unit had a stable quarter.

  • Troy

    Congrats to Google on a great quarter! Motorola represents a critical investment as the company pushes more into own-brand hardware, a strategy with which we agree.

  • Jeff Buckley

    “mobile advertising no stands” should be “mobile advertising now stands”.
    Andy wishful thinking on Goo’s part.