Inside a midtown hotel, Larry Fischer is on his mobile phone with a financial backer as his partner Ari Goldberger does quick research on a laptop computer.

They are bidding furiously at this auction of Internet domain names, with hopes of snagging megayachts.com. The duo won’t be deterred. They want this name.

“$110,000 (euro79,693), yes or no? Quick,” Fischer barks at Eli, the investor at the end of the phone.

Someone else makes a bid for $120,000 (euro86,938). Fischer and Goldberger up the ante, and then again.

Going once, going twice … sold to Fischer and Goldberger for $150,000 (euro108,672).

“You got it,” a smiling Fischer tells Eli.

These are boom times in an estimated $2 billion (euro1.45 billion) industry that involves the buying and selling of domain names. When people type the generic names into their Web browser’s address field, sites that generate pay-per-click advertising revenue appear. Such “direct navigation” bypasses search engines.

“This industry is like the wild, wild West right now and people have no idea how fast it’s growing,” said Jerry Nolte, managing partner of Domainer’s Magazine, a new trade publication devoted to this little-known world.

Some believe the industry’s market value could reach $4 billion (euro2.9 billion) by 2010 as people continue to purchase approximately 90,000 names a day and the number of domain registrars swells.

At the end of first quarter 2007, at least 128 million domain names had been registered worldwide, a 31 percent increase over the previous year, according to VeriSign Inc., which runs some of the core domain name directories for the Internet.

“It’s not about words,” said Monte Cahn, founder and CEO of Moniker.com, a company that specializes in domain asset management and held the Manhattan auction. “It’s like real estate. This industry is only about a decade old. People looked at domain names as a commodity. It’s a piece of real estate on the Web that can’t be replaced. It’s your stake in the ground, your stake in the Internet.”

At the Manhattan auction, Fischer and Goldberger snatched up four names for more than $1.2 million (euro870,000) and a fifth for a client, representing only a handful of the names sold for a total of $12.4 million (euro9 million) during both the live and silent auction.

The auctions were held during a domain conference in June that attracts some of the biggest players in this niche business.

One name _ creditcheck.com _ went for $3 million (euro2.2 million) but paled in comparison to the sale of sex.com, which sold for $12 million (euro8.7 million) last year, according to Cahn, who knew the site’s buyer and seller.

Fischer, 44, and Goldberger, 46, figured there was money to be made early.

Goldberger’s entry into the business was unorthodox to say the least. In 1996, the Hearst Corp. sued him, alleging trademark infringement after Goldberger registered esqwire.com, which resembles one of the company’s magazines.

The two sides eventually settled and Goldberger, a lawyer, was allowed to keep the name. Word got out that Goldberger knew something about the thorny legal issues involving Internet domain names and people began approaching him for advice.

Goldberger’s fascination with the burgeoning industry was sealed.

“I was an entrepreneur strapped into this suit-and-tie job,” Goldberger said. “Kind of a square peg in a round whole and this lawsuit just kind of changed everything for me.”

He eventually left the respected Philadelphia law firm where he worked in 1997 and joined a small startup in Manhattan called mail.com, which was buying up domain names.

Goldberger began collaborating with Fischer in 2001, building their portfolio of domain names. Together, they became a formidable yet quirky team.

Two years later, they created a company called smartname.com, which they sold earlier this year. The company took names and provided content and links for owners, getting a cut of the advertising revenue. At one point, smartname.com represented 150 owners with about 150,000 domain names, generating 50 million unique visitors a month.

Most of the sites are lucrative for their advertising US dollars. For example, megayachts.com isn’t an actual yachting site, but it contains numerous ads and links for real yacht companies, boats and cruises. The owners of the site get paid each time a viewer clicks on one of those links.

Goldberger and Fischer declined to say how much money they make from pay-per-click advertising.

Bob Parsons, CEO and founder of domain registration company GoDaddy.com, says this type of business is fairly straightforward.

“They make their money in two ways,” Parsons said. “One way is through the traffic they get and the other is the appreciation of the name.”

Parson didn’t think there was anything wrong with the practice as long as those involved weren’t using names trademarked by others.

“Domain names are becoming 21st century real estate,” Parsons said. “Just owning a domain name as an investment, I don’t see a problem with that.”

Anthony Malutta, a lawyer who specializes in trademark law at a San Francisco law firm, sees fewer trademark infringement cases thanks to improved laws.

“Trademark law involving domain laws is much clearer and much easier to understand,” he said. “It’s pretty clear that registering a domain name that corresponds to somebody’s trademark is actionable. As to generics, they’re just hoping to capture traffic. You’re just counting on people typing in generic names instead of using a search engine like Google.”

Malutta said domainers like Goldberger and Fischer are not “gaming the system” which in his opinion would mean registering domain names and then cybersquatting _ driving revenue off somebody else’s trademarked name like Coca-Cola.

Over the years, Goldberger and Fischer have sharpened their formula for acquiring domain names and developing the sites using a fairly simple template, relying on research, savvy and plenty of instinct.

“You either know it or don’t by hearing the name,” Fischer says.

They look for names that hit the “sweet spot” _ short words that describe a high-value product or services related to it. Words that allow them to own a category such as bald.com and cardiology.com, two of the domain names they bought at the auction.

To help figure out a word’s potential value, they see how many hits it will produce using Google. They also troll lists of names with domain registrations set to expire, enabling them to get a jump on buying it.

They don’t bother with dot-nets or the others.

“Dot-com is king,” Goldberger said. “Dot-net is worthless.”

But there’s a big divide between thinking of a good name and getting it. There’s usually a chase, with Fischer trying to persuade owners to sell the names after he locates the owners unless it’s up for auction.

“He’s kind of like a rhinoceros,” Goldberger says about Fischer. “He chases them up a tree and waits them out. He has patience and determination. You got to be aggressive. It’s a tough game now. It’s like the gold rush. The first guys did really well then it became more difficult.”

And expensive. Five years ago, the duo could get a good name for $10,000 (euro7,245). Now the minimum is more like $100,000 (euro72,448) _ as the auction proved. The cheapest name they bought at the auction was blogging.com for $135,000 (euro97,805). Other names sold for considerably less like irishwhiskey.com ($8,000, euro5,796) and Jewishdeli.com ($9,000, euro6,520).

At the moment, Fischer, Goldberger and Eli are sitting on their names. They’ve recently turned down million-dollar offers for stocks.com and home.com.

But as white-hot as this business has been, it might not continue to mint millionaires.

“How long will this model last?” Malutta asked. “It’s definitely a temporal piece of real estate. As technology evolves, maybe direct navigation will fall off the charts and there goes your property.”

The fact that Andrew Miller and Michael Zapolin don’t speak German was never a problem, until the two Internet investors decided to buy the domain name “choco-late.com.” The owner, a man in Germany who didn’t speak English, was content to paper the site with ads for chocolate companies and collect pocket change whenever someone clicked on one. But Miller, 42, and Zapolin, 40, saw the chance to make millions. “We knew nobody was doing a good job with chocolate in the online space,” says the fast-talking Miller. “And we were imagining how much free chocolate we’d get,” jokes Zapolin, a New Age enthusiast who goes by the nickname “Zappy.” After weeks of voice mail and e-mail messages, all in English, a lawyer in Atlanta called to say he was representing the man. Within days, they were able to buy the domain for $300,000—a fraction of the cost of other generic sites.

Two years later, the Boston-based duo has built an online emporium, complete with boutique sweets, recipes, and articles that run the gamut from the health benefits of dark chocolate to the history of chocolate Santas. As with a mall owner, the key was to attract an anchor tenant in the form of Chocolatier magazine, which provides articles and recipes to the site. Traffic has so far doubled this year, and the site is on track to clear $2 million in revenue. Convinced that chocolate.com could become a $100 million property, they’re now turning away would-be suitors.

It’s another victory for Miller and Zapolin. Through their company, Internet Real Estate Group, they’ve made a career of buying underappreciated domain names on the cheap and turning them into multimillion-dollar properties. Instead of flooding a site with pay-per-click ads and flipping the domain for a quick profit, they’re trying to develop real businesses that will sell for much more. They own 17 domains, ranging from software.com to relationship.com, with a closely guarded list of several others they would like to buy—if the price is right.

They work out of a brownstone on Boston’s tony Newbury Street but prefer doing business at their local Brigham’s ice cream shop. Miller describes himself as the aggressive one who’s always hunting for the next big deal. Zapolin is more laid back and focuses on creatively expanding the sites. They met in the late 1980s as sales trainees at the ill-fated junk-bond house Drexel Burnham Lambert, getting together for gambling trips to Atlantic City and later teaming up to produce infomercials. One of their clients, The Grateful Dead, inspired them to get into the domain game with its success in using www.dead.net to sell merchandise and bring together fans.

They bought control of beer.com for $80,000 in 1998 and built an audience for the site by giving out free e-mail addresses and having fans rate different brews. Less than a year later, they sold it for $7 million to Interbrew, a beer company. The pair then bought creditcards.com for $100,000 in 2003, created a comparison site for credit-card offers, and sold it to a private equity buyer for $2.8 million in 2004. Now that it’s valued by some at several hundred million dollars, they admit to selling too soon.

The crux of the business is the domain name. Chocolate.com automatically gets thousands of visitors a day who type the word “chocolate” into the address line of their Web browser instead of a search site like Google (GOOG ). About one in six Internet searchers never goes to a search site, opting instead for direct navigation. The name also helped the site vault ahead of famous names like Hershey’s and Godiva in Google searches.

Such advantages help explain why the market for generic domain names is booming. Deals for resold domain names hit $700 million last year, about double the figure in 2005 and quadruple the 2004 level, according to Sedo, a domain name brokerage and appraisal firm in Cambridge, Mass.

Determined to turn the name of a popular produce into a lucrative business, Zapolin and Miller don’t want to sell chocolate.com—yet. The memories of offloading creditcards.com too soon also still rankles, though they laugh it off now. “We’re not crying in our soup over credit cards,” Zapolin says with a smile over a raspberry lime rickey and a peanut butter and jelly sandwich at Brigham’s. “We’ve got a few more in our portfolio.”

Internet auction site eBay has bought StumbleUpon, a website that recommends other websites, for $75m (£38m).
The deal means eBay will get access to almost 2.5 million registered users, who recommend sites to each other.

Users get search results that are based on their profiles, which the site says gives them more relevant results than a regular search engine.

EBay had $3.5bn in cash last month and has been on an acquisition spree buying firms such as Shopping.com and StubHub.

StumbleUpon was founded in 2001 by three Canadian software engineers in Calgary.

It is free for users and generates revenue through advertising, although users may pay an annual fee to avoid seeing any adverts.

StumbleUpon’s founders and managers will become eBay employees and eBay’s Michael Buhr will become its general manager.

Source: BBC

GROWTH in the online advertising industry shows few signs of slowing, with ads generated by search engines and directories surging ahead of banners, pop-ups and classified ads.

Advertisers spent $294 million advertising online in the first quarter of 2007, according to the first report delivered by PricewaterhouseCoopers.

The January-March quarter has always been the weakest and this appears likely to occur again this year, with the market dipping 7 per cent on the preceding quarter. But it was 50 per cent up on the same quarter last year, leading observers to tip the medium will finish the financial year at $1.15 billion.

Search engines and directories such as Yellow Pages continue to pull away from the rest of the pack, with the area pulling in $139.5 million in the quarter, representing nearly half of all the dollars spent online. Display and classifieds share the remainder equally, according to PwC’s Online Advertising Expenditure Report.

But the report by PwC noted that figures were likely to be conservative as, unlike its predecessor, it does not include revenue estimates for publishers who refuse to disclose figures. The one exception it has to make is Google, which with Yahoo! makes up 80 per cent of the search and categories market.

Steve Allen, of Fusion Strategy, said he was comfortable with his forecast that the online ad market would grow by 54 per cent to $1.5 billion by the end of 2007. “Senior figures don’t suggest to us that there is any waning of interest in bookings to the internet,” he said.

He was surprised at the acceleration of growth in search and directories but, because Google refused to disclose its figures, it was still a matter of guesswork.

“The method PWC employs is different … there’s been a debate for some time about what Google is writing in this country and we certainly feel it was being under-reported, but that was in the past. It might be different now.”

Analysts expect Google to write about $300 million in ads this calender year.

A Google spokesman said the company continued to keep its figures to itself.

“However, what we can say is that we are observing strong growth in this segment as more businesses are becoming aware of including search in their marketing. And, we think search has got some way to go in terms of growth in Australia.”

Source: Sydney Herald

It takes an entrepreneurial fire in your belly to start a business and make it succeed. Not everyone has it. How do you know if you have what it takes to start a business? There’s really no way to know for sure.

But I do find things in common among the emotional and family fabric of people ready to consider an entrepreneurial venture.

You don’t have to fit all seven of these categories to be a good candidate for entrepreneurship. But it probably wouldn’t hurt. In general, the more you have in common with these characteristics, the closer you probably are to being ready to try going out on your own.

1.
You come from a line of people who couldn’t work for someone else. I don’t mean that in a negative way. People who are successful at establishing their own business tend to have had parents who worked for themselves. It’s usually easier to get a job with a company than to start your own business; people who strike out on their own often have the direct example of a parent to look to.

2.
You’re a rubbish employee. No need to sugar-coat this one. People who start their own businesses tend to have been fired from or quit more than one job. I’m not saying you were laid off for lack of work or moved from one job to a better-paying one. You were asked to leave, or you quit before they could fire you. Think of it as the marketplace telling you that the only person who can effectively motivate and manage you is yourself.

3.
You see more than one definition of “job security.” I am truly envious of the few people I know who have stayed with one employer for 25 or 30 years. They look very secure. But how many people do you know who are able to stay with one company for that long? In a rapidly changing economy, job security can be frighteningly fleeting.

4.
You’ve gone as far as you can go, or you’re not going anywhere at all. Sometimes the motivation to start a new venture comes from having reached the top of the pile where you are, looking around, and saying, “What’s next?” Early success can be wonderful, but early retirement can sometimes drive energetic and motivated people totally crazy.

5.
You’ve done the market research already. Don’t even talk to me about your great business idea if you haven’t put the time into figuring out if there’s a market for your product or service. As the people behind any number of failed Internet ventures will tell you, “cool” doesn’t necessarily translate into “profitable.” Don’t bother building it if you haven’t figured out whether there’s a good chance the customers will come.

6.
You’ve got the support of your family. Starting a business is stressful under the best of circumstances. Trying to do it without the support of your spouse or other significant family members or friends would probably be unbearable.

7.
You know you cannot do it alone. You might excel at promoting a business. Maybe you love running the financial end of the enterprise. You could be someone who starts a business because you have unique creative or technical know-how to create a product.

Any of the above is possible, but it’s unlikely that you are going to excel at all of these tasks — or at all of the tasks involved in running any business. Forget all that doing it alone stuff. You are going to need some help sometime.

The willingness to get that help — having employees, partners or consultants for those areas in which you are not an expert — is one indicator of likely future success. “No successful entrepreneur has ever succeeded alone,” development consultant Ernesto Sirolli writes in “Ripples From the Zambezi.” “The person who is most capable of enlisting the support of others is the most likely to succeed.”

Internet search engine Google said its ability to cash in on web advertising had helped its profits almost triple.

The company made a net profit of $1.03bn (£524.4m) in the last three months of 2006 – compared to $372.2m a year ago.

It said the result, on sales of $3.2bn, was helped by high internet traffic in the holiday shopping season.

Google said its partnerships – such as the purchase of video sharing website YouTube – were “going extremely well”.

Targeted

The firm said it paid out $976 million to websites which featured Google advertising.

This was a figure which was likely to continue growing, it added.

President of Technology at Google, Sergey Brin, said the firm had increased the number of adverts which were produced when searches were made for commercial goods.

The number of adverts on less commercial searches had been cut back, he added.

Adverts were becoming increasingly targeted to what was being searched for, he said.

Google paid $1.65bn for YouTube in October – with analysts saying it looked likely to see a benefit from the purchase.

The move should give it a key spot in the emerging online video market, and help it become a leading provider of web-based video advertising space.

In November, shares in the Google breached the $500 mark and are now trading at around $490.

Google shares have been boosted by strong growth, and expectations that the firm will continue to capitalise on the online advertising market.

It has also benefited from problems at its closest rival, Yahoo.

Internet-based retailers cleaned up over Christmas after spending online surged by 54 per cent to £7.7bn during the period, beating expectations.

In two years, the amount of goods bought over the web has more than doubled, reflecting a push by high street chains to improve their online presence. In the 10 weeks to Christmas Eve, internet sales hit £7.7bn, up from £5bn during the same period the previous year, according to Interactive Media in Retail Group.

Shoppers spent £1bn a week in the first three weeks of December, beating the IMRG’s forecasts.

[tag]YouTube[/tag] has finally made its first dollar (and about 1.65 billion at that) instead of just losing money. It was acquired by Google. [tag]Google[/tag] hopes that YouTube will do for Google Video what [tag]Google Video[/tag] failed to do for people willing to post their videos on the net. What will change on YouTube? Not much probably, but start expecting more targetted advertising. The co-founders of YouTube, [tag]Chad and Steve[/tag] have a little word for the people that made them rich. You.

Today I discovered [tag]Yahoo[/tag]! have recently released [tag]Yahoo Time Capsule[/tag], a site that archives peoples [tag]photos[/tag], videos, thoughts etc. It appears to have only been launched in the past few weeks.

Why gutted ? This is a project i’ve been working on for over 12 months, my site was called TheWorldInFaces.com and was going to [tag]archive[/tag] peoples faces & photos from around the world, with small blog transcripts & timestamps, archiving the ever changing faces of the world for years to come.

Progress was slow due to running out of development budget, why didnt I have the budget ? Could I have obtained the budget ? Did I not really believe in it enough to make it happen ? Did I not give the project enough focus ?

How much has this potentially cost me ? Done right, in the short term probably a few £x00,000k, over the years to come Id say a few million.

Something to ponder over a few beers whilst waiting for England to KO…..

YouTube wildly profitable? by ZDNet’s Mitch Ratcliffe — Froosh over at hipmojo.com argues that YouTube is “wildly profitable” and estimates the company pulls down $7.5 million a month in revenue. Venture capitalist Fred Wilson says Froosh’s analsysis is not “crazy math,” but I’d argue it is sketchy and decidedly optimistic math. Let’s go to the numbers…. Froosh’s income statement for YouTube looks like [...]

Integrating offline with online in [tag]ad campaigns[/tag] has been proven to increase [tag]brand awareness[/tag], [tag]brand image[/tag] & [tag]purchase intent[/tag].

Brand awareness can increase by upto 4% whilst purchase intent can be more than 2% higher as a result of [tag]online ad campaigns[/tag].

(Source: Dynamic logic survey which researched over 400 ad campaigns)

[tag]Interactive ads[/tag] raise [tag]brand awareness[/tag] by up to 13% and [tag]brand recall[/tag] by up to 199%, depending on sector (Taylor Nelson Sofres / iAB)

Large rectangle sizes ans superbanners are the most effective for raising awareness (Dynamic logic / Nielsen)

“Whatever the mind of man can conceive and believe, it can achieve.”

“Your big [tag]opportunity[/tag] may be right where you are now.”

“The battle is all over except the “shouting” when one knows what is wanted and has made up his mind to get it, whatever the price may be.”

A few interesting statistics about [tag]ad recall[/tag] & the effectiveness of the ad medium:

77% of online shoppers read reviews from other users by ZDNet’s ZDNet Research — 77% of online shoppers use consumer generated product reviews/ratings and those who find them useful are more loyal to stores with reviews/ratings featured, JupiterResearch reports.

The 1st episode of a new series of The Dragons Den was shown last night at 20:00 on BBC2. Dragons’ Den is a series where entrepreneurs pitch their ideas to secure investment finance from our dragons – elite business entrepreneurs.

Meet the dragons:

Duncan Bannatyne

Top pitching tip – Know your numbers, know your percentages.
Cardinal pitching sin – The very worst thing you can ever do is arrive late.
Motto – You only live once. If you don’t enjoy it, it’s your fault, nobody else’s.

A poverty-stricken childhood steeled Duncan’s drive to make his fortune from an early age. He began his entrepreneurial life by trading in cars, but it was with an ice cream van that he changed the course of his life – setting out to become the king of the ‘99′.
He then switched to nursing homes, becoming a multi-millionaire in the process. Since then Duncan has built up a chain of health clubs called ‘Bannatyne’s’ and also owns Bannatyne’s Casino, Bar and Hotels.
Estimated to be worth more than £170m, Duncan holds an OBE and was recently awarded an honorary Doctor of Science (D.Sc.) from Glasgow Caledonian University for services to business and charity.
He was also North Region Entrepreneur of the Year 2003 and Master Entrepreneur Of The Year 2003 for the North Region.

Peter Jones

Top pitching tip – Know your end goal and work towards it.
Cardinal pitching sin – Do not over exaggerate the opportunity, be clear and concise.
Motto – Believe in yourself, never give up and go about your business with passion drive and enthusiasm.

Peter’s entrepreneurial journey started early when, at the age of 16, he founded a tennis academy. He then set up a computer business and had various other business interests.
At the age of 28, Peter joined corporate giant Siemens Nixdorf and ran the computer business in the UK. In 1998 he founded Phones International Group, a telecommunications firm that now generates revenues in excess of £200m.
His business interests range from telecoms, leisure, publishing as well as TV and media. Peter has won many national awards, including Emerging Entrepreneur of the Year in 2001. Aged 40, Peter is considered to be one of the UK’s leading young businessmen.

Theo Paphitis

Top pitching tip – Make sure you look right and have the answers that will press the dragons’ buttons.
Cardinal sin – A lack of cashflow is like a heart attack – if you can’t pay your bills you’re out of business.
Motto – There are three reasons to be in business. To make money, to have fun – and to make money.

Born in Cyprus, Theo came to England when he was six and was running the tuck shop at his north London school at 15. Starting out as tea boy at a City insurance broker, he found his flair for retail as a shop assistant at Watches of Switzerland.
Theo returned to the insurance industry in sales at 20, where he discovered his natural ability of pointing out the obvious and applying common sense (which is not common). In no time he was helping businesses in difficulty and this soon became a full time role.
He has turned Ryman, Contessa, La Senza and Partners the Stationers into successful and profitable retail businesses.
He now heads up a 350 store chain and a group turnover approaching £250m. His latest ventures include Red Letter Days, the company he salvaged out of administration with fellow Dragon Peter Jones.

And we have two new dragons for this series:

Deborah Meaden

British multi-millionairess, Deborah Meaden launched her own glass and ceramics export company straight out of business college, before setting up one of the first Stefanel fashion franchises in the UK.
With several successful business in the leisure and retail sector under her belt, she became Managing Director of her family’s holiday park business Weststar Holidays, acquired the major shareholding in a management buyout and later sold the company in a deal worth £33 million whilst retaining a 23% stake.
She still retains an active role at Weststar but is devoting more time to finding good investment opportunities, the first of which has been a market research company.

Richard Farleigh

New Dragon, Australian multi-millionaire Richard is a full time business angel who has possibly invested in more new UK companies than any other British investor.
With a penchant for private equity investment in young high growth technology startups, the list of companies he has put his money in reads like the who’s who of the UK tech sector – including Amino Technology, ANT, Celoxica, Clearspeed, ARC International, Argonaut Software, IP2IPO and Wolfson Microelectronics, amongst others.

For any budding entrepreneur, this is a must watch!

The UK is now officially the largest online retail market in Europe, according to Mintel. Driven by the increase in broadband use, total online spending in the UK is now at £6.69bn against £6.63bn in Germany.

Total European internet sales are up 51% on last year to a total of £27.48bn, with 2 thirds coming from the UK, Germany and France. Further growth is predicted, as online retail currently makes up only 2% of the total European retail market – this is set to rise over the next 3-4 years to 5%, when the total market will be worth £78.61bn.

By MYLENE MANGALINDAN, Wall Street Journal
July 20, 2006 6:45 p.m.

Google Inc.’s second-quarter profit doubled and revenue soared 77%, an indication that the Web search company is gaining market share and controlling its costs as more advertisers shift their spending to the Internet from traditional media.

The results, which sent Google shares up more than 1% in after-hours trading, contrast with that of rival Yahoo Inc. earlier this week. On Tuesday, Yahoo said it would delay some improvements to its search-advertising system, an announcement that sent Yahoo’s shares down 22% on Wednesday.

For months, Google has been walking a fine line trying to meet outsized Wall Street’s earnings expectations while ramping up spending to accommodate its ambitious global and technology expansion plans. Wall Street and Silicon Valley companies have been looking for a turning point at which the company will show signs of slowing revenue and profit growth, but that point doesn’t yet appear to have come.

In the latest quarter, analyst Safa Rashtchy of Piper Jaffray & Co. said Google not only was able to control its expenses, but it appears to be gaining market share against rivals such as Yahoo and Microsoft Corp. “This is one of the best outcomes we could have for Google” in what is considered a slow quarter, he said.

Google’s expenses, particularly capital expenditures, have been rising as the company invests in computers, networking equipment and facilities to maintain its competitive and technological edge. Google’s expenses rose 81% to $1.64 billion in the quarter from a year ago, in line with analysts’ expectations and previous quarters. Meanwhile, the company’s total costs in the first quarter rose 86% from a year ago, and last year’s fourth-quarter costs rose 85% from a year earlier.

Capital expenditures in the second quarter were $699 million, including $319 million related to real-estate purchases. The company said it expects its growth rate for capital expenditures this year will be “substantially greater” than its revenue growth rate for 2006.

Net income was $721.1 million, or $2.33 a share, compared with $342.8 million, or $1.19 a share, a year ago. Excluding certain stock-based compensation and other factors, Google earned $2.49 a share compared to analysts’ forecast of $2.22, according to Thomson First Call.

Revenue rose to $2.46 billion from $1.38 billion. Excluding commissions paid to marketing partners, revenue was $1.67 billion, above analysts’ expectations of $1.645 billion.

Google reported results after the close of the market. At 4 p.m. in Nasdaq composite trading, the stock was at $387.12, down $11.88. Shares rose to $390.14 in after hours trading.

Google continues to outpace Yahoo and Microsoft Corp. in the search-technology market world-wide. In the U.S., Google’s share of Web search rose to about 48% in the second quarter through May. That compared to Yahoo’s 31% share and Microsoft’s 14%, which were flat and down respectively from the first quarter, according to investment research firm Majestic Research Corp.

Google co-founder Sergey Brin attributed the U.S. market share gain to improvements in the relevance of the company’s search service and its ease of use.

Many analysts consider Google’s search-advertising system to be superior to rivals because it delivers more relevant advertising results, allowing Google to generate more revenue from those ads. Both Yahoo and Microsoft are investing heavily to develop search-advertising systems to compete with Google’s, but have struggled to match Google’s technology, say some analysts.

In a conference call, Google Chief Executive Eric Schmidt said partnerships remain important as a way to increase Google’s reach and distribution into different markets and areas. Company executives said Google’s partnership with Time Warner Inc.’s America Online unit, for instance, is on track. Under that deal, which was signed last December, Google agreed to invest in AOL and AOL agreed to use Google’s search technology, with both sharing revenue from search advertising.

Discuss ways of making money and investment strategies with like minded people at TalkFinances.com

This is a book I recently read whilst on holiday & found it easy to read & excellent motivator for budding entrepreneurs. Heres a quick intro:

“Inspired by the true story of a flight with Sir Richard Branson, Millionaire Upgrade blows the lid off the accepted belief that successful entrepreneurs are a breed apart, possessing some special magic.

Through the combined wisdom of interviews with 50 self-made millionaire entrepreneurs, this book takes you on your own personal master class in success, as experienced through the eyes of Tom, a frustrated employee who is upgraded on a long haul flight, and finds himself sitting next to self made millionaire Michael. During the flight Michael shares the science and secrets behind his own success.

Better than any in-flight movie, Millionaire Upgrade gets you inside the minds of successful entrepreneurs and self-made millionaires giving you the inside track on how they think and act.”

And heres what other successful entrepreneurs have said about this excellent publication:

“It took me a long time to learn this stuff—I wish I’d been on that plane 30 years ago!”
—Simon Woodroffe – YO! Sushi & Dragons Den

“The principles of success apply equally whether you are an aspiring entrepreneur, chief executive of a large plc or simply looking for inspiration for your own personal life. Here’s where you start, by reading this book.”
—Allan Leighton – Chairman, Royal Mail

“If you want a toolkit to help you become a successful entrepreneur, read this book. Then put it into practice.”
—Duncan Bannatyne – Bannatyne Leisure & Dragons Den

“Everything in business is a learning experience. I should know! I’d recommend all would-be entrepreneurs to read this book and be inspired to boldly set out on your own entrepreneurial journey. You won’t regret it.”
—Rachel Elnaugh – Red Letter Days and Dragons’ Den

“It is refreshing to find a book that describes the key difference between the entrepreneur and the rest – attitude. So often in life a cigarette paper’s thickness separates success from failure and Richard has written a book that perfectly captures this and suggests a way of thinking that can transform the tin of dog food into a thoroughbred racehorse.”
—Tim Smit – Eden Project

“Millionaire Upgrade captures the essence of what it takes to be successful in anything you choose to do. The rules of success are timeless and simply explained so you can apply them in your own business or personal life.”
—BJ Cunningham – Founder of Death Cigarettes

“In Millionaire MBA, Richard decoded entrepreneurs and unpicked their millionaire mindset. With Millionaire Upgrade, he has put it all back together again through IBELIEVE and a compelling story. Very clever and a must read for any budding entrepreneur!”
—Rene Carayol – Leadership Guru

“It takes a certain mindset to succeed in creating your own business. This book spells out how you need to think and act to succeed – whether you are an entrepreneur or a professional manager. It’s a great read too.”
—Matthew Barrett – Chairman, Barclays Bank

Read more here