SAN FRANCISCO (AFP) – Another stellar financial quarter has left Internet giant Google with money to burn on gobbling up top engineers and technology firms.
Google reported on Thursday that its first quarter net profit rose by more than 37 percent while revenue increased by 23 percent to 6.8 billion dollars.
The Mountain View, California-based Internet search and advertising giant said net profit in the quarter that ended on March 31 was 1.96 billion dollars, compared to 1.42 billion dollars in the same quarter a year ago.
Google chief financial officer Patrick Pichette said revenue growth was "driven by strength across all major verticals and geographies."
Despite the strong financial showing, Google's stock price sagged more than four percent to 567.30 dollars per share in after-hours trading that followed the release of the earnings report.
While Google's earnings topped Wall Street expectations investors were concerned that the firm's fierce pace of hiring signals a shift to free spending ways that could erode future profit.
Google hired 800 people during the quarter and remains hungry for new talent.
"Every time I can find another great engineer we are going to hire them; Google needs them," Pichette said during an earnings conference call.
"On the other side there is discipline. It is not like you can do whatever you want around here."
Google is open to bolstering its forces by acquiring technology firms as well as by hiring, according to executives.
"The bar at Google has not changed; it remains incredibly high," Pichette said. "We have so many projects that we would love to have more engineers right now."
Google reported that it ended the first three months of this year with slightly more than 20,600 employees.
The economy is on the mend and Google is reaping benefits in all aspects of the firm from YouTube and Internet advertising to offerings tailored for smartphones and businesses, according to the firm.
"It is really clear that the digital economy continues to grow rapidly," Pichette said. "We are continuing to invest heavily in people, products, and acquisitions."
Google declined to reveal how many Nexus One smartphones have been bought since it began selling the Android software-based handsets on January 5.
"We are very happy with the device uptake and the impact it has had across the market," said Google engineering senior vice president Jeff Hubert.
Open-source Android powers 34 models of smartphones, with more than 60,000 of the gadgets activated daily, according to Hubert.
The online Android Market has more than 38,000 applications available for smartphones running on the software.
Pichette defended Google's move to stop censoring Internet search results in China at the risk of losing ground in that country's booming market.
"This was a tough situation where we really think we made the right decision," Pichette said.
Google's defiance of China over Internet censorship will not have a short-term financial impact on the company but could prove significant in the long run, according to analysts interviewed by AFP.
At the same time, Google's decision to no longer censor Web search results in China does allow the Internet giant to realign itself with the principles of its founders and the company motto of "Don't be evil."
Google last month shifted queries at its China search engine, Google.cn, to an uncensored site in Hong Kong.
Google would like to continue to have a presence in China, which has an Internet population of nearly 400 million and where Google has embarked on a number of ventures besides search.
Google's defiance of the "Great Firewall of China" was lauded by human rights groups, members of the US Congress and others although it has been unable to get other Western technology companies to rally to its cause.
"In a company driven by values, you make a decision based on values," Pichette said while discussing the matter with analysts.
"We still have sales in China. The fact that we serve them from Hong Kong doesn't stop us from having all the opportunity we want from the Chinese market."