Google's net income rises in first quarter

Jumps to $1.4 billion as revenue increases by only 6%

Google posted big profit and relatively small growth in its fiscal first quarter.

The YouTube parent and top Internet search engine said Thursday that its net income rose to $1.42 billion from $1.31 billion in the same frame a year ago. Revenue rose 6%, a tiny amount for Google, to $5.51 billion.

Google reported its results just as news was leaking that its YouTube property had struck deals to post ad-supported TV shows and feature films from Sony Pictures, Lionsgate, MGM, CBS, Starz and others.

Google shares rose 2.4% on Thursday to $388.74 and are up 34% in the past six weeks. By most metrics, Google's earnings beat expectations, sending shares surging in after-hours trading, but by the time a conference call with analysts had sunk in, the after-hours gains had been wiped out.

Google CEO Eric Schmidt said the company was "absolutely feeling the impact" of a weak economy and that advertisers were bidding less for Google's inventory. He called such behavior "entirely rational."

The company ended the quarter with $17.8 billion in cash, though don't expect any YouTube-like acquisitions anytime soon. "Cash is not burning a hole in our pocket," Schmidt said. "Our view at the moment is to remain conservative."

Google ended the quarter with 20,164 full-time employees, 54 fewer than at year's end.

The company also said global sales chief Omid Kordestani will step down and that his duties will be taken over by president of international operations Nikesh Arora, now promoted to president of global sales operations and business development. Kordestani will become a senior adviser to the office of the CEO and founders.