GOOGLE this week officially proved itself to be the darling of the internet world, with the group’s latest results suggesting that the company is increasing its lead over its its biggest rivals, Yahoo! and Microsoft.

Shares in Google yesterday rallied by almost 9 per cent to $449.69 in early trading as investors breathed a sigh of relief in the wake of the group’s first-quarter results. The shares closed more than 5 per cent up at $437.10.

Analysts said that an array of positive factors — including strong growth in advertising, search market share gains, and improvements in keyword pricing — made Google “well positioned to grow at a rapid rate for the foreseeable future”.

Google’s online search engine remains the company’s big money-maker, and the latest results suggest that the company is gaining ground on its rivals.

The search advertising market, in which Google specialises, is not only more attractive to advertisers than classified advertising in newspapers but is for many the most attractive means of advertising on the internet. As consumers become more savvy, they are becoming less responsive to flash adverts and any advertising that could be felt to be intrusive. Advertisers are constantly searching for ways to entice customers without bombarding them with adverts. Search advertising fits these criteria.

While Google’s internet competitors, which rely on advertising, are becoming increasingly aware of the appeal of search advertising, Google got there first. As well as having a name silly enough to encourage users to log on in the first place, Google was able to employ the right people and create the right technology to encourage consumers, and subsequently advertisers, to come back again and again.

Google’s search engine has remained consistent and focused on search-related advertising, so that it does not push away happy customers with intrusive adverts.

The company is also good at preparing for the worst. In July, in anticipation of an eventual possible slowdown in revenues from search adverts, it will start to charge for AdWords, a do-it-yourself advertising service that it has offered free to marketing and advertising firms.

The move raises questions about whether Google will make similar changes affecting access to other services.

BATTLE OF THE INTERNET

eBay

First-quarter net income fell 3.1 per cent to $248.3 million

Google

First-quarter net income of $592 million, up from $369 million a year earlier

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