Google's Schmidt forecasts 'strong year' for Android

Google reported first quarter net income of $1.42 billion, an 8 percent jump from year-ago totals and higher than analyst forecasts. Revenue rose just 6 percent in Q1 to $5.51 billion, up from $5.2 billion a year ago but off 3 percent from fourth quarter 2008 [1] revenues of $5.70 billion, heralding Google's first quarter-over-quarter decline since it went public in 2004. The web services giant blamed its slowing growth on the reduction in online advertising budgets: "No company is recession-proof," Google CEO Eric Schmidt said in a conference call with investors. "Google is absolutely feeling the impact. Users are still searching, but they are buying less."

Google CFO Patrick Pichette nevertheless added that the firm will continue to make "significant investments" in its future. "While we remain focused on operational efficiencies, we're not cutting any corners on our growth agenda and continue to fully fund both our core business and our growth businesses," Pichette said.

Analysts credited Google's first quarter performance on the company's efforts to control costs and reduce expenses. "Clearly the upside came from severe cost controls," Thomas Weisel Partners analyst Christa Quarles tells the New York Times, noting that Google's capital expenditures, which include spending on data centers, dropped to $263 million in Q1 from $846 million in the first quarter of 2008. "They've been doing a lot of data center efficiency and consolidation."

During Thursday's conference call, Schmidt also addressed the status of Google's Android mobile operating system. "Overall, it looks like Android is going to have a very strong year," he said. "There are announcements happening between now and the end of the year that are quite significant from operators and new hardware partners in the Android space which I won't preannounce." Schmidt added that a number of firms are working with Android on netbooks.

For more on Google's Q1 results:
- read this New York Times article [2]

Related articles:
Google [3]: More than a million Latitude users in first week
Google [4] upgrades Gmail for iPhone and Android
Google [5] most visited mobile website in U.S., says Opera