Due to the weak economy and the tightening advertising budgets, analysts have anticipated worse results for the search giant . In fact, Google refuted these expectations announcing rise in profits.

The company reported $5.54 billion in revenue for Q3, which represents a 31 percent increase year-over-year. The net income for the third quarter of 2008 was $1.35 billion as compared to $1.25 billion for the second quarter of 2008. Paid clicks went up with approximately 18%.

Search engine advertising continued to do well, despite the economic downturn and proved to be the only recession-proof segment of the online advertising.

Admittedly, advertising on Google is much more affordable than traditional marketing campaigns. Google offers the companies the chance to target their advertisements at people who are already looking for related information. Furthermore, search advertising is more easily measured and has the opportunity to provide plenty of behavioral data.

Surprisingly or not, Google’s revenues from the outside of US surpassed local revenues for the first time, attributable to the weakness in the US economy. Also, Google properties delivered twice as much growth (34 percent) as Google network (15 percent).

Earlier this week TechCrunch reported that Google’s overall share of search queries in the U.S. dipped from 63% in August to 62.9% in September, while Yahoo and Ask (whose search is powered by Google) saw the biggest gains.

Copyright © 2010 DevStart, Inc. Permission is required to use the material on this page.