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Google’s Dominance of the Internet Expected to Continue

Friday, 20 Apr 2007 | 10:40 AM ET
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Christa Quarles, an analyst at Thomas Wiesel Partners, told CNBC’s “Squawk on the Street” that Google’s strong growth and recent acquisitions suggest that the search giant will continue to dominate the Internet.

“(The company’s growth is) broad based,” Quarles said Friday. “International continues to be the fastest growing component. It was up 72%. Domestically, (Google) was up 47%. Interestingly, Google’s owned-and-operated sites performed significantly better than its affiliate sites so they continue to take market share from their partners.”

Google’s first quarter net income rose to $1 billion, or $3.18 a diluted share, from $592 million, or $1.95 a share for the same period a year ago. Excluding one-time option expenses, profit was $3.68 a share compared with $2.29 a share a year ago. The consensus Wall Street estimate was $3.30 a share.

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“We are looking to see what the next big categories are,” Quarles said. “We’ve identified mobile (search) as an important category for them. They’ve indicated that in Japan, mobile is performing extremely well. Obviously, with the DoubleClick acquisition, we’re looking to display advertising and eventually YouTube will start generating some revenue.”

Google continues to take market share from rivals Yahoo and Microsoft.

“Query share has been an important component,” she said. “You look at Google over the past several years, they continue to march upward. I think the important component is: where the queries go, ultimately that’s where the dollars go. The company that can get the critical mass of queries will get more than its share of dollars.”

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