Google More Bullet-Proof than Ever after Q3 Showing

In another show if its dominance in the search arena, Google reported nearly double the third-quarter profit it posted last year, blowing past both analysts’ expectations and the 38% drop in profits at Yahoo! for the same quarter.

Google’s net income for the quarter was $733 million, a modest increase from last quarter’s $721 million but a hefty 92% increase year over year.

“Business is very, very good here at Google,” CEO Eric Schmidt said in a conference call following the earnings announcement.

Google earned $2.69 billion in revenue during the third quarter, up 70% from $1.6 billion in the same quarter a year ago, and 10% more than last quarter’s $2.46 billion. Minus commissions to ad partners, Google took in $1.58 billion in sales during the quarter.

Sixty percent of that total quarterly revenue–$1.63 billion– came from Google-owned sites, while sites in the AdSense network brought in 39% of total revenue, or $1.04 billion.

Google has introduced so many new product and feature initiatives this year, from enhancements to Google Maps and local search to mobile ads, hosted office applications and video, that co-founder Sergey Brin said it risks over-diversifying.

“If we continue to develop so many individual products in separate silos, you’ll have to search for the product you want before you can use it,” he said. “You’ll end up doing a search before you search.” He said Google will stress links to let users move smoothly among those offerings.

Wall Street’s reaction to the Google earnings announcement was strong, lifting the shares by more than 7% in after-hours trading Thursday and putting the company on track to increase its market value by $10 billion on Friday. Market capitalization like that would be sufficient to cover the $1.65 billion Google said it will pay for video-sharing site YouTube and finance another five deals of similar size — if those exist.