The tech and search marketing worlds breathed a sigh of relief as Google posted a strong third quarter report today. While most observers expected Google growth, the shear size of the company’s quarterly revenues, $5.54 billion, is pleasantly surprising. Google’s performance is seen as a key indicator of the online advertising sector’s health.

Google is also a key indicator of where digital communication (online marketing and the such) is going.

“We had a good third quarter with strong traffic and revenue growth across all of our major geographies thanks to the underlying strength of our core search and ads business. The measurability and ROI of search-based advertising remain key assets for Google. 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.” – Google CEO Eric Schmidt, Q3 press release.

Schmidt’s quote is carefully crafted. Try reading each sentence as singular statements.

“We had a good third quarter with strong traffic and revenue growth across all of our major geographies thanks to the underlying strength of our core search and ads business.”

Google continues to see the vast majority of its revenues come from paid search advertising. Ads appearing in Google’s general search results returned $3.67 billion while ads served to content partners through AdSense returned $1.68 billion.

“The measurability and ROI of search-based advertising remain key assets for Google.”

Traffic from paid clicks (those found in Google SERPs and on partner sites) increased by almost 18% over the same period last year and rose by about 4% over the second quarter of this year. Advertisers and webmasters are comfortable with Google’s ad-system and consumers keep on clicking. Google’s revenues are increasingly coming from clicks outside the United States. $2.85 billion of Q3 revenues (approximately 51%) came from Internet users outside the US. On a more trivial note, Google made money on foreign markets as well. Google’s Q3 books saw a $34 million benefit through its foreign exchange risk management program.

“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.”

Google acknowledges growth in click-through rates is slowing but it is actively developing alternative revenue streams in enterprise search engines, search and Internet via mobile devices and banner ad placements. Enterprise search can mean everything from massive-database management for government and corporate repositories to the development of Google productivity applications like Google Docs. Mobile is covered by the Android platform and the dream phone, which hit store shelves two days ago. Display is all about DoubleClick. Watch for Google’s behavioural understanding of its users to improve the delivery of display advertising.

Google shares (GOOG) which have drastically devalued over the past four months, jumped 10.12% in after-hour trading to $388.42. GOOG shares flirted with the $750 range just twelve months ago and $730 range earlier this year.

Another traditional bellwether of the Internet economy issues its Q3 results next week. Yahoo! issues its Q3 report next Tuesday.

— addendum — twenty minutes later.

So I am listening to Danny Sullivan and Michael Grey on the WebmasterRadio show Daily Search Cast and Danny made an interesting point on Schmidt’s quote. Search and Internet marketers are the ones who understand how Google’s advertising platforms are a mixture of creative writing and informed bid-resource management. There are an increasing number of areas or venues for search and Internet marketing to move into.