Google sales miss estimates as ad fees per click fall

Google Inc, owner of the world's most popular internet search engine, reported profit that topped analysts' estimates as advertisers increased spending on mobile and video promotions.

First-quarter profit, excluding some items, was $11.58 a share, Google said yesterday in a statement. Analysts had projected $10.68 per share, according to data compiled by Bloomberg. Net income increased 16 per cent to $3.35 billion, or $9.94 a share.

Google is pushing beyond its roots as a desktop-based search business to enter new ad-driven markets, including smartphones, web services and video, stepping up competition with Apple Inc and Microsoft Corp. The company's search and video businesses bolstered results with Google-owned sites generating $8.64 billion in revenue for the quarter, up 18 per cent from a year earlier, according to Benjamin Schachter, an analyst at Macquarie Securities USA Inc.

"The core business is still doing well," Schachter said. "They're managing to maintain a lot of strength in that core business across geographies."

First-quarter revenue, excluding sales passed on to partner sites, rose to $11 billion, Google said. Analysts had projected sales of $11.2 billion, according to data compiled by Bloomberg.

Shares of Mountain View, California-based Google rose 1.4 per cent to $776.80 yesterday in extended trading.

Earlier, they declined 2.1 per cent to $765.91 at the New York close. The stock has advanced 8.3 per cent this year, compared with an 8.1 per cent gain for the Standard & Poor's 500 Index.

Tax credit
The company benefited in the first quarter from a federal credit that helped reduce its tax rate and boost earnings, Patrick Pichette, CFO, said yesterday on a conference call with analysts.