Google announces strong earnings growth, Wall Street breathes.

Google this morning reported strong financial results for the quarter ended March 31. In the current bear market analysts had predicted doom and gloom for Google, among other tech shares. But as Intel and IBM did a couple of days ago, Google blew past analyst expectations to record net income of $US1.31 billion, up 31 percent from the same quarter a year ago. Revenue was also up 42 percent to $5.19 billion.

According to Google's press release, Google-owned sites generated 66 percent of the total revenue, while the AdSense program, where Google displays ads on non-Google owned sites, generated the rest. Interestingly, 51 percent of revenue came from outside the US - a positive sign, and one that was reiterated in this mornings conference call by Eric Schmidt, CEO of Google when he said 'It's clear to us that we're well positioned for 2008 and beyond, regardless of the business environment that we find ourselves surrounded by.'

Google also revealed some other interesting tidbits during the conference call including the fact that mobile search traffic is 'growing rapidly' and users are adding ten hours of new video to YouTube every minute.

Despite its reputation for extraordinary indulgences for staffers, Google held expenses at a constant 30 percent of revenues - which, if you do the math works out at $1.53 billion. But what Google is doing with that $1.53 billion in expenses in one quarter is anybody's guess... no doubt part of that was spent on some new features for Google Earth and the recent redesign of Google Docs.

On Friday, Google shares ere up 17 percent in after hours trading, but GOOG had already fallen from its 52 week high of $747.24 per share and closed on Friday morning at $449.54. Next week we'll get more insight in to the state of the tech market when Apple report earnings on Wednesday morning.