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Google Unveils Record Q3 Profits & eBook Store Plans

Gordon Kelly


Google Unveils Record Q3 Profits & eBook Store Plans

Un. Stoppable.

That seems to be the underlying theme at Google right now as the company posted yet more record results despite the economic gloom and then announced its plans to take over the eBook sector.

On the financial side highlights were a $1.6bn (£1bn) profit for its third quarter (up 27 per cent on Q3 2008) while revenue over the three month period was a monstrous $5.94bn. That a 27 per cent profit margin and cash reserves now total over $22bn!

"The worst of the recession is clearly behind us," said Google CEO Eric Schmidt. "Because of what we have seen, we now have the confidence to be optimistic about our future." With remarkable quarter after remarkable quarter 'confident' would seem something of an understatement.

On top of this Google has announced it will storm into the paid eBook space next year with 'Google Editions' - an online book store counterpart to free Google books project. Google Editions titles will be sold in an open format to both mobile phones and dedicated eBook readers and given this is Google there are no half measures with between 400,000 and 600,000 titles expected to be ready at launch. This compares to 330,000 currently at Amazon (for the Kindle) and just over 100,000 on Sony's eBook store.

"It will be a browser-based access," said Tom Turvey, head of Google Book Search's publisher partnership program, surprising no one. "The way the ebook market will evolve is by accessing the book from anywhere, from an access point of view and also from a geographical point of view. Google Editions allows retail partners to sell their books, especially those who haven't invested in a digital platform. We expect the majority {of customers} will go to retail partners not to Google. We are a wholesaler, a book distributor."

Google will take a 55 per cent cut on store profits giving the "vast majority" of this to retailers with the rest going to the publisher. Of course the big question in all this is how will Google price its books? After all, the company isn't known to charge for - well - anything!

Before any proposed launch Google also still has a number of international copyright battles to fight, but given its current run of success it would be a brave man to bet against it being stopped by anyone or anything right now...


Financial Results

Google Editions via AP


October 16, 2009, 6:29 pm

Hmmm, I shall be watching them closely (for more insight as to why I will be doing so, please see the comments to the new Sony eBook reader review).


October 16, 2009, 8:48 pm

Just a short question if anyone knows - how does Google make its income (is it through search and advertising?) and why is it proving so resistant to the economic downturn?

Tim Sutton

October 17, 2009, 3:59 am


That's a pretty massive question for a comments section! On a Friday! When we've all been drinking!

Short answer is Google makes its money through advertising, and their share of all advertising revenue everywhere is increasing proportionally faster than the total amount of advertising revenue everywhere is shrinking.

The pie may be getting smaller, but Googles piece of it is getting larger. They get more pie than they were getting before, even though there is less pie to go around.

As to WHY.. man. Lots of reasons. Easy one is: MASSIVE market domination in internet search + people increasingly spending online = profit! (Thankyou underpant gnomes.)


October 17, 2009, 8:45 pm

@Tim - Yep, a pretty loaded question (in retrospect) but you answered it very well. Thanks for the answer :thumbsup:


October 17, 2009, 10:53 pm

Will be interesting to see, hopefully the Sony Reader will support the paid store and Google will use industry standard DRM or go DRM free entirely, though I don't think it is necessarily a good idea yet for eBooks as anyone who is technically minded enough to buy an eBook reader will know enough about torrents and PDFs, unlike the millions of MP3 player owners who will pay for music online leaving only a minority of pirates.

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