According to their SEC filings, Google turned a profit for the first time in 2001. Their first funding ($100k) came in 1998. They then secured $25m in 1999.
AdWords was not launched until 2000 so it wasn't possible they were turning a profit before then.
They were profitable from their deals to supply search technology to Yahoo, etc. If they didn't call themselves profitable in their SEC filings, it was presumably because of some accounting rule about the cost of options or something like that.
Yeah, I'd like to see a source for this too. I recall there being a big flap about how much money they were burning back in 2000/2001 with no possibility of revenue (hah).
In fact, IIRC it was Google's success at doing the "Get users first and profit will come" that made it fashionable among Web 2.0 startups. The idea was pretty disreputable after hundreds of Web 1.0 startups tried it and flamed out spectacularly.
I get the impression that Google cares so little about haters that they don't even bother to correct them. If someone claims they're doing something immoral, then they'll respond, because they don't want people to have a bad opinion of their character. But if someone says they're stupid or won't make money, their attitude seems to be that the appropriate punishment is to remain benighted.
AdWords was not launched until 2000 so it wasn't possible they were turning a profit before then.