The Spanish newspaper El Pais is reporting that Google Spain “only” earned €1.8 million in 2005, for a profit of €96,000, up 83% from 2004 when Google Spain had profits of €52,827. Turnover was up 49% relative to 2004, when sales totaled €1,222,000. Google opened its Spanish subsidiary in 2003, with turnover of €291,319 and a profit of €5,445.

What’s surprising is that Google’s search engine has at least a 90% market share, according to Nielsen/Netratings. One would expect that Google would earn substantially more money than Idealista and Infojobs, but according to these official results, Google Spain is a mediocre Internet start-up.

El Pais notes that analysts estimate that Google dominates 75% of the Spanish online ad marketing. In 2005, the total value of this market was €120.5 million, which would mean that Google Spain should have earned about €90 million, not the €1.8 million suggested by the registered annual accounts. Another interesting note is that last year Google Spain made a big deal last year about inaugurating cool new offices in the Torre Picasso in Madrid with capacity for 130 employees. But the official accounts only account for 10 employees, who have an aggregate salary of €953,845, up 57.5% from 2004, when the aggregate salary was €605,597. And it appears that Google Spain has not officially hired anyone over the last two years.

One can only assume that this is just another case of creative accounting with very little basis in reality . . . . the case of a corporate parent boosting its bottomline without the money passing through the local subsidiaries.