Google shrugged off the gloom that followed its previous earnings statement with a strong first quarter. The advertising monster reported a profit of $592m for Q1 2006. That's up from the $372m reported in January, which caused $18bn to be wiped off Google's value.

Gross revenue climbed 79 per cent to $2.25bn, up from $1.26bn a year ago and up 17 per cent sequentially.

Traffic Acquisition Costs on Google's Adsense program increased overall, but more importantly, declined as an overall percentage of Google revenue, down from 33 per cent to 32 per cent, or $723m. Advertising on Google's own properties, which unlike Adsense is pure profit, edged up a percentage point to 58 per cent of Google's earnings.

On the news of the earnings, and the official settlement of two click fraud suits, Google's stock climbed $28.25 to $443.25 on after hours trading.

eBay found itself clobbered today for its earnings forecast. Google doesn't do earnings forecasts.

But the one tidbit Google threw analysts quickly boomeranged on the company.

CEO Eric Schmidt told analysts he thought "China is up for grabs", a view contradicted by Sergey Brin in a New York Times magazine feature to be published this weekend.

"Revenue, Brin told me, wasn't a big part of the equation," the Times reports.

"He said he thought it would be years before Google would make much if any profit in China. In fact, he argued, going into China 'wasn't as much a business decision as a decision about getting people information.'"

Who'd have guessed? ®

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