Google Inc's quarterly profit beat estimates as revenues grew at their strongest sequential pace in more than a year, sending its shares up 2.4 percent.

Google's market-leading search advertising business has weathered the recession better than other ad-dependent companies, and analysts have widely expected it to be one of the earliest beneficiaries of an economic recovery.

Google has no competition. Yahoo is withering on the vine and (Microsoft's ) Bing is too tiny now, said Colin Gillis, senior analyst at Brigantine Advisors.

They did great on every single metric. We think this is sustainable.

Google, the world's No. 1 search engine, posted revenue excluding traffic acquisition costs -- the money that Google shares with partners -- of $4.38 billion in the third quarter, beating the $4.24 billion expected by analysts.

Gross revenue was $5.94 billion, up 7 percent from $5.52 billion in the second quarter and $5.54 billion in the year-earlier period.

Net income was $1.64 billion, or $5.13 a share, compared with $1.29 billion, or $4.06 per share, a year earlier.

Excluding items, profit per share was $5.89, beating the $5.42 expected by analysts, according to Thomson Reuters I/B/E/S.

While there is a lot of uncertainty about the pace of economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future, Chief Executive Eric Schmidt said in a statement.

He told analysts on a conference call that Google was stepping up hiring and open to acquisitions.

We're open for business in making strategic acquisitions, both large and small, Schmidt said.

Google shares have surged roughly 84 percent since mid-March, setting a fresh 52-week high of $535.58 on Wednesday.

(Reporting by Alexei Oreskovic; Editing by Richard Chang)

Google Microsoft