Google says the Worst is Over

Online search giant Google says the worst of the recession is over as it reported quarterly profit and sales that rose from year-earlier results and easily topped Wall Street's forecasts.

"Google had a strong quarter-we saw 7 percent year-over-year revenue growth despite the tough economic conditions," said Eric SchmidtEric Schmidt, Google's chief executive, on a conference call with investors Thursday.

"While there is a lot of uncertainty about the pace of economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future."

Google's strong third quarter could be a good sign for the economy, as the company's ad clicks serve as a kind of barometer of consumers' willingness to spend, CNNMoney.com said. The more people click on ads, the more willing they are to buy things.

"It's all good news from our perspective," said Schmidt. "I'm very proud of our management team in what could have been a very significant downturn for Google."

By the numbers: The Mountain View, California-based search giant's net income was $1.64 billion, or $5.13 per share, in the third quarter, up 27 percent from the same period last year.

Excluding one-time charges, including $95 million from a Google Books settlement with the Authors Guild, Google reported earnings of $1.88 billion, or $5.89 per share.

Analysts polled by Thomson Reuters, who typically exclude one-time charges from their forecasts, expected earnings of $5.42 per share.

Sales rose 7 percent to $5.94 billion. Excluding advertising sales that Google shares with partners, a figure also known as traffic acquisition costs, the company reported revenue of $4.38 billion, which beat analysts' forecast of $4.24 billion.

Google makes the vast majority of its sales from online advertising, a market that has struggled over the past year.

But two important indicators of advertising market health improved: The number of paid clicks, which include clicks on ads served on Google sites and its partners, rose 4 percent from the previous quarter and 14 percent from the same period last year.

The average amount paid to Google per click also increased about 5 percent from last quarter. That figure was down about 6 percent from the same period a year ago, but the company said that much of that discrepancy had to do with currency fluctuations.