After the sudden jump in stock value of Yahoo! yesterday because of a remark made by Microsoft CEO Steve Ballmer, today has been the turn of Google. The company stock price gained considerably — with a peak of fourteen percent — after their third-quarted earnings reported earlier today were significantly better than expected, revealing that Google managed to cut its running costs very effectively even in spite of the current economic downturn.

According to the statements released by the company, Google revenue was of $5.54 billion in the quarter ended Sept. 30, an increase of 31 percent from $4.23 billion a year ago, while profit rose by 26 percent. The company cut on spending by slowing its hiring and reduced its capital expenses to contrast the unfavorable economic conditions that are affecting many other Fortune 500 companies in the IT business.

Still according to the report, the number of paid advertisement clicks grew by 4 percent compared to the second quarter, rising by 18 percent compared to the same period a year ago. Google CEO Eric Schmidt tried to explain that tighter budgets from advertisers might actually end up increasing the Web traffic, and its profit potential with it:

"As marketing budgets are squeezed, targeted measurable ads are becoming more valuable to advertisers, and as consumer budgets are squeezed, people use the web for comparison shopping to hunt for bargains online and in stores [...] While we are realistic about the poor state of the global economy, we will continue to manage Google for the long term, driving improvements to search and ads, while also investing in future growth areas such as enterprise, mobile, and display."

According to Jeffrey Lindsay, analyst with Sanford C. Bernstein & Co., the number of queries is actually going up. To his analysis, even i

n though economic times people don't stop searching for things online, but they simply search for different things. "Even if someone loses their job, they're going to look on the Internet for a new job," he said.

To many, this last quarter's report was just the kick Google needed to give new hope to investors, after the stock fell about 20 percent during the course of the last two months, and by 36 percent during the last quarter as a consequence of analysts predicting a general slowdown in the company revenue, which mostly comes from its Internet search advertising business.

Google employees in particular have one more valid reason to watch the market very closely since, as explained by TechCrunch, a huge chunk of their options — 1.7 million across the company — were granted with a weighted average exercise price of $329.78, which means the options are worthless under that price. In addition to that, there are another 5.7 million options that were granted at prices of $450 and above.

Until yesterday, 61 percent of Google's stock options granted to employees were virtually worthless, since Google was quoted below both thresholds at about $309: the recent rally put the price back up to $350 and above, which means that at least one of the two types of options is valid at the moment and that both Google employees and investors can rest assured the company is ready to face tough times without renouncing to growth and innovation.

The Mountain View search giant is reputed to be a one-of-a-kind company as far as employees benefits are concerned, with free meals, gym, massages, sauna and car wash all included in the package, just to name a few. It is maybe also because of this that a spending cut seemed hard, if not hardly possible, to analysts, since it would have damaged the image of the company, certainly one of Google's core assets.