Google Income Up 37%, Even With More Hires, Marketing

Google Inc. (GOOG) spent the first quarter hiring more employees and spending more on marketing, signs that the Web giant feels optimistic about the economy.

That optimism, though, seemed to frighten investors somewhat. On Friday, the first trading day after Google announced its latest earnings, shares were trading down between 6 and 7 percent. The Associated Press said investors seemed worried that Google’s numbers, which surpassed analysts’ expectations, could mean the company is abandoning some of the financial restraint it exercised during the recession.

But Google CFO Patrick Pichette disagreed.

“Hiring more people does not mean we are wasteful,” he told The AP. “It just means we have a great agenda.”

The agenda appears to include the continued rolling-out of Android-based devices such as the Nexus One. Google didn’t disclose how many of those smartphones it has shipped so far, but said about 60,000 sell each day.

That revenue, in addition to more people clicking on Google’s Internet ads, all combined to give Google solid first-quarter numbers: The company earned almost $2 billion, compared to $1.42 billion in the year-ago quarter. That marked a 37 percent increase. Revenue rose as well, by 23 percent, to $6.78 billion. Once advertising-partner commission was factored in, revenue dropped to $5.06 billion, but that still was about $90 million higher than analysts had forecast.

Google ended the quarter with 20,621 employees, the most in its nearly 12-year history. The company hired about 800 new workers; executives said recently they plan to take on about 2,000 additional people this year. It also boosted its sales and marketing outlay by 47 percent to $553 million.

Shares of Google were trading down 6.14 percent at $558.73 at about 1 p.m. Eastern.

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