Google Earns Its Racing Stripes: Fool by Numbers

On Oct. 18, search and marketing giant Google (NASDAQ:GOOG) released third-quarter earnings for the period ended Sept. 30. The results?

• Build a great search engine and the users will come. And then you just have to monetize that service-to-user relationship -- which happens to be the company's other core competency. The result is a 57% yearly revenue jump, coupled with strong profits.
  
• The margin slide comes from a hiring spree over the summer, where the company picked up a crop of college graduates while their caps and gowns still had fresh champagne stains. Google added more than 2,100 new employees in the quarter, including about 300 in the Postini acquisition, and most of them set up camp in the engineering and sales/marketing department.
  
• While the stock may look expensive at more than $630 per stub, given the earnings improvements, that's a trailing P/E ratio of around 50. Compare that to the likes of fellow e-commerce giants Amazon (NASDAQ:AMZN) and Baidu (NASDAQ:BIDU), which have trailing P/Es of 124 and 188, respectively.

(Figures in millions, except per-share data)

Income Statement Highlights

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Margin Checkup

Margins are the earnings engine.

Balance Sheet Highlights

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Cash Flow Highlights

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Competitive Context

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