It seems Google has weathered the recession quite well, thank you. The search superpower reported a better-than-expected third-quarter increase in net income of 32 percent, signaling growing confidence in the profitability of online and mobile device advertising.

In a peek at the revenue future, advertising on YouTube and other websites and mobile devices could generate $3.5 billion for Google in the year ahead. –JCL

The New York Times:

Google has spent the last few months arguing to anyone who will listen that its new advertising businesses — including ads with images and video and on cellphones — will fuel its next phase of growth. On Thursday, the company finally gave some numbers to support the claim.

Search advertising revenue still drove Google’s better-than-expected performance in the third quarter, when revenue climbed 23 percent and net income rose 32 percent. But for the first time Google said on a call with analysts, display ads — nontext ads with images and video on YouTube and other Web sites — are on track to generate more than $2.5 billion in revenue in the coming year, while mobile ads are on track to contribute another $1 billion.

“Where’s the next multibillion-dollar business after search?” said Jonathan Rosenberg, senior vice president of product management at Google, on the call. “There’s your answer. It’s display and it’s already here.” About mobile, he said, “Clearly this is the future of search and the Internet.”

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