Profits up at Google and Microsoft

Increase in online advertising and business sales help firms boost revenues and profits

Increase in online advertising and business sales help firms boost revenues and profits

Both Microsoft and Google have reported a rise in profits.

Google saw its net profit climb to $3.35bn (£2.19bn) in the first three months of the year. That is up 16 per cent from the same time last year.

It is believed an increase in revenue from online advertising is the main reason for the increase.

Falling PC sales and a lukewarm reception to Windows 8 failed to dent Microsoft's profits. It made $6bn (£3.9bn) in the same period. That was up 17 per cent from the same time last year.

Business IT giant IBM however saw a fall in its first quarter profits.

Analysts speaking to the BBC said that Microsoft's success was down to it changing the way it sold Windows and Office to business customers.

"Microsoft has successfully transitioned into an enterprise software company and these results show that," said Kim Caughey Forrest, a senior analyst at Fort Pitt Capital.

"The strength of server and tools, and the actual way they sell licences to business, is making up for the missing PC sales.

"The margins are fantastic and the online services division seems to lose less money each quarter," she added.

Google's increased profits were down to the growth in online advertising. Revenues were up over $3bn compared to the same time last year, to $14bn.