Search engine reports $369.2 mil quarterly profit

What’s good for Google is likely to be bad for traditional media, especially radio and television.

The eye-popping revenue and profit growth reported last Thursday by the most-used Internet search engine — profit up more than five-fold to $369.2 million for the quarter and sales nearly doubling to $1.26 billion — came from surging Internet advertising.

“The numbers from Google are, by any definition, spectacular,” said Bob Parker, deputy chairman of Credit Suisse Asset Management in London, which oversees $335 billion. “There’s going to be a clear shift from radio and TV advertising to Internet advertising. That clearly benefits companies like Google.”

The stock, sold to the public at $85, rose $11.59 to close Friday at $215.81 in Nasdaq composite trading after earlier surging to $224. That surpassed the previous record of $216.80 after last quarter’s earnings report. Yahoo, which this week also reported a surge in profit and record sales, fell 71¢ to $35.16.

The increase in Google’s stock price pushed the company’s market value to $60 billion, more than media congloms such as Viacom and Disney, not to mention industrial icons such asGeneral Motors, Ford and Hewlett-Packard.

Google shares are worth $275 to $290 each, Goldman, Sachs analyst Anthony Noto in New York said Friday. Noto, the top-ranked Internet analyst by Institutional Investor magazine, called Google’s earnings report “outstanding.”

Record revenue from Google and Sunnyvale, Calif.-based Yahoo illustrates the growing shift of advertising spending from traditional media such as newspapers and broadcast television.

Internet advertising “is probably about 3 or 4 percent of worldwide spending but growing very rapidly,” WPP Group chief executive officer Martin Sorrell said. WPP is the world’s second-biggest advertising company.

“We are seeing it overtake radio, for example, in the U.K. and online purchasing is growing at a prodigious rate in the U.S.,” Sorrell said.

Google’s quarterly sales eclipse the combined revenue of the New York Times, the third-largest U.S. newspaper company and Dow Jones, publisher of the Wall Street Journal.

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