In Google's second quarter, the company missed expectations for profit and issued a more cautious assessment of the online advertising market, sending the stock down to $478 or so. With the current economic pessimism, that price looks downright giddy: Google's stock closed at $353.02 a share on Thursday, and Collins Stewart analyst Sandeep Aggarwal pointed out that a full third of Google's employees have nothing but valueless "underwater" stock options that have greatly diminished incentive value.
"We had a good third quarter with strong traffic and revenue growth across all of our major geographies thanks to the underlying strength of our core search and ads business. The measurability and return on investment of search-based advertising remain key assets for Google," said Chief Executive Eric Schmidt in a statement. "While we are realistic about the poor state of the global economy, we will continue to manage Google for the long term, driving improvements to search and ads, while also investing in future growth areas such as enterprise, mobile, and display."
Using generally accepted accounting principles, net income increased from $1.07 billion in the year-earlier quarter and $1.25 billion in the second quarter to $1.35 billion in the third, the company said.
