Shares of Google Inc flirted with new highs on Friday after the Web search leader's quarterly results showed more of the dramatic advertising growth that has made it a Wall Street darling. Google said on Thursday its first-quarter gross revenue nearly doubled to $1.26 billion - a level that now surpasses that of some traditional media outlets. For example, Clear Channel Communications Inc, the No 1 US radio station owner, had radio revenue of $964.5 million in its most recently reported quarter.
Google's shares rose almost 10 percent to $224 at the start of trade on the Nasdaq on Friday, topping the record high of $216.80 reached in February. By the close of trade, however, shares had retreated to $215.81, up $11.59 or almost 6 percent.
Global search advertising revenues are seen hitting $7.9 billion this year, then nearly tripling to $23.2 billion by 2010, according to estimates from Piper Jaffray & Co.
Growth is being fuelled by rapid overseas expansion of Web search advertising - also known as paid search - and by adoption from mainstream advertisers and consumers.
Google and Yahoo Inc dominate the market, which generates nearly all of Google's revenue and just under half of Yahoo's.
Audiences already are forsaking traditional media in favour of the Web, and advertisers are following. Ad-skipping technology such as TiVo and on-demand video services also have forced advertisers to seek new markets.
Paid search advertising was estimated to be about a $4 billion industry in the United States last year - growing at a rate of as much as 50 percent annually, though that is expected to moderate to about 25 percent in future years, according to some projections.
By comparison, Yellow Pages directories, which are expected to take in about $14.4 billion in advertising this year, are posting roughly 3 percent to 5 percent ad growth, according to 2005 estimates from Robert Coen, senior vice president for forecasting at Interpublic Group's Universal McCann.
USA Today publisher the Gannett Co Inc - the largest US newspaper group in terms of circulation - reported newspaper advertising of $1.22 billion in the first quarter, up 5 percent from a year earlier - virtually matching Google's total revenue, which included $462 million in commissions paid to Web sites that carry Google search ads.