Google+ tops 10 million users as profit up 36% in second quarter

Google announced a higher than expected 36% increase in profit for the second quarter of the year, sending shares up 11% as the search engine giant confirmed impressive growth in its Android and advertising businesses.

The results saw analysts praise co-founder Larry Page and his new management style after he took over from Eric Schmidt earlier this year.

“We have substantially increased our velocity and execution this quarter, a key goal of mine since taking over as CEO,” he says.

“It’s why I created a new, product-focused management structure with a clear leader responsible for each product area,” he said.

The announcement comes after the surprising success of Google’s first entry into social networking, Google+, which according to Page has more than 10 million users and is fast-tracking the creation of corporate pages.

Corporate pages have been a huge success on Facebook, where businesses use them to market, connect with customers and offer products that otherwise would not be available on main websites.

Google announced its financial results overnight, saying profit had grown to $US2.51 billion, up from $US1.84 billion in the previous corresponding quarter. Revenue was $US9.03 billion, up from $US6.82 billion.

Google’s growth rate slowed recently as investors moved onto fresh start-ups for more impressive growth but Page says the company’s core businesses – search – is growing strong, with paid clicks up by 18% and the average price marketers paid to Google growing by 12%.

Page says he views the company’s products in three separate categories – search and advertising, consumer-oriented businesses such as YouTube and Android, and finally social programs such as Google+ and local commerce.

“Of course I understand the need to balance the short term with the longer term needs because our revenues and growth serve as the engine that funds our innovation,” he says.

“But our emerging high usage products can generate huge new businesses for Google in the long run, just like search. And we have tons of experience monetising successful products over time.”

Growth in Android has been surprising and the company is seeing more than 550,000 activations daily, up from 500,000 less than a month ago, while the operating system is available on more than 130 million devices.

“Despite the efforts of some of our competitors there hasn’t been any slow-down … we’re really committed to Android,” he said.

Android is enjoying impressive growth compared to Microsoft, Research In Motion and Apple but Page’s comment yesterday that he will continue to support Android “in a cost effective manner” has some analysts scratching their heads.

But the real discussion of the day concerned Google+ with Page announcing that the network has more than 10 million users and that more than one billion items are being shared every day.

With the company pitting itself against Facebook analysts say that may be a good start.

“Google+ is also a great example of another focus of mine – beautiful products that are simple and intuitive to use and it was actually was one of the first products to contain our new visual redesign,” Page said.

Part of Google’s strategy in that area is consolidating and renaming its brands, and streamlining them under the Google+ banner.

It said Picasa will be renamed Google Photos while Page hinted that Gmail and other everyday services will start to integrate more with Google+.

He took a dig at Facebook, saying Google+ allows users to share “like how you would share in real life”.

It appears that the business take-up of Google+ is growing. The company originally intended for corporate pages to launch later this year but in a blog post yesterday product manager Christian Oestlien said the testing process will be fast-tracked.

“Dennis Troper (product manager for business profiles), myself and the rest our team will focus next week on selecting a diverse set of business partners for the test period,” he says.

“We will be communicating with these partners next week and will let the world know who they are soon thereafter.”

Google warned that businesses opening profiles will be deleted from the service because it wants to keep the test period solely for individuals.