SAN FRANCISCO — Google has entered some surprising new businesses in the last few weeks, like robotic cars that do not need drivers and wind energy farms in the Atlantic Ocean. But the company has not been neglecting its core business, search advertising, which drove Google’s better-than-expected performance in the third quarter.
Google reported net income in the quarter ending Sept. 30 rose 32 percent to $2.17 billion, or $6.72 cents a share, from the year-ago quarter. Excluding the cost of stock options and the related tax benefits, Google’s third-quarter profit was $7.64 a share. The company said revenue climbed 23 percent to $7.29 billion. Net revenue, which excludes commissions paid to advertising partners, was $5.48 billion, up from $4.38 billion a year ago.
The results were above the expectations of Wall Street analysts. They had expected adjusted income of $6.67 a share and net revenue of $5.2 billion.
“Our core business grew very well, and our newer businesses, particularly display and mobile, continued to show significant momentum,” Eric E. Schmidt, Google’s chief executive, said in a statement. “Going forward, we remain committed to aggressive investment in both our people and our products as we pursue an innovation agenda.”
Google investors seemed to like the results; in after-hours trading, the stock was up more than 9 percent.
For the first time, Google offered some data on revenue from its display and mobile advertising businesses, on a call with analysts. Display ads — non-text ads with images and video on YouTube and other sites across the Web — are expected to account for more than $2.5 billion in revenue this year, Google said. Mobile ads will contribute $1 billion to annual revenue. Google’s search business, which accounts for the vast majority of its revenue, showed improvement in the third quarter. The company said paid clicks on ads on Google sites and other sites that run Google ads grew 16 percent over the year-ago quarter and 4 percent from the second quarter.
That is a good sign for the rest of the year, said Jordan Rohan, a managing director at Stifel Nicolaus and an Internet and digital media analyst.
“September is a pretty good predictor of the rest of the year, because there’s a high correlation between back-to-school and the holiday season” in terms of advertiser interest, he said.
But investors have been waiting to see when Google’s new advertising businesses, like mobile advertising, display ads with video and images and ads on YouTube, will significantly affect revenue.
Mark S. Mahaney, managing director of Internet research at Citigroup, said Google would reach that tipping point if revenue growth from the year-ago quarter exceeded 24 percent or if growth from the last quarter exceeded 6 percent. Google is hovering around that point — revenue grew 23 percent from last year and 7 percent from last quarter.
Even if Google’s other ad businesses are big, its search revenue is so large that they do not move the needle. That is why Google is beginning to go after the television advertising market with its introduction this month of Google TV, which lets people access the Web on their television screens.
“If you really want to move the needle, why don’t you target that north of $50 billion in revenue that’s spent on television screens?” said Colin W. Gillis, technology analyst at BGC Partners. “Television’s ripe for disrupting as people are fast-forwarding through TV ads.”
Google has also been rapidly investing in other areas, which weighs on its profit margins and “causes some investors to wince,” Mr. Gillis said.
Google hired 1,526 people in the quarter, which included the post-graduation hiring months, bringing the total number of employees to 23,331.
Google has also been investing in its new businesses that are not yet generating revenue, including the robotic car project and a large investment in wind energy farms, as well as its Android mobile phones, Chrome browser and operating system and its social networking efforts to head off competition from Facebook.
