We recently reported that Google made changes to their sponsored ad listings and that analysts were attributing those changes to the Google's plumeting stock price.

However, today, Google Inc. announced a first-quarter profit increase of 30 percent to surpass analysts' predictions. This performance alleviates the economic worries that have hammered the Internet search leader's stock this year. Fears that Google made the wrong decision by cutting out low yielding sponsored ads to display fewer high quality sponsors may after all be the right move.

The Mountain View-based company said it earned $1.31 billion, or $4.12 per share, during the first three months of the year. That compared with $1 billion, or $3.18 per share, in the first quarter of 2007. If not for expenses to cover stock given its employees, Google said it would have made $4.84 per share. That figure outstripped the average projection of $4.52 per share among analysts surveyed by Thomson Financial.

"It's clear we are well positioned for 2008 and beyond, regardless of the business environment we are surrounded by," Google Chief Executive Eric Schmidt told analysts during a Thursday conference call.

The news, released after the stock market closed Thursday, lifted Google's recently drooping shares almost 18 percent.

Source: Google 1st Quarter Results Press Announcment - April 16th, 2008