Google shares jump as its third quarter beats expectations

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Windmills? Driverless cars?

Let Google do whatever Google wants.

Shares jumped 8% in after-hours trading to $578.16 after the Internet search giant walloped expectations Thursday. Net income rose 32% to $2.2 billion, or $6.72 a share, from $1.6 billion, or $5.13 a share, even as Google added 1,500 employees in the third quarter and spent more than four times as much on data centers and other equipment than it did a year ago.

That’s because Google, which rules Internet search advertising, was able to charge advertisers higher rates for ads and more Internet users clicked on those ads.

Excluding certain expenses, Google earned $7.64 a share, outpacing the $6.69 a share analysts had predicted.

Revenue rose 23% to $7.3 billion. Excluding commissions paid to its advertising partners, Google’s revenue hit $5.5 billion, about $200 million more than analysts expected. Shares closed down $2.37 to $540.93 in regular trading.

Google’s chief financial officer Patrick Pichette on a conference call with analysts said Google is operating at ‘full throttle.’ Google is heavily investing in people and products, he said.

Investors have been concerned about the company’s spending on renewable energy projects, automated cars and other projects as Google faces rising competition to its online advertising business from Facebook.

‘We are investing,’ Pichette said. ‘We are just not a wasteful company.’

Google is a bellwether for Internet advertising. According to eMarketer, advertisers spent $6.15 billion on internet ads in the third quarter, up 11.8% from the same period in 2009. For the full year, US online advertising spending is set to reach $25.1 billion, of which search ads will account for 49.3% of total revenues.

-- Jessica Guynn