(Reuters) - Google Inc reported a 12 percent rise in quarterly revenue, helped by a 13 percent jump in the number of ads, or paid clicks, but missed lofty Wall Street expectations.
Shares of the world's No. 1 Internet search engine rose 3.8 percent in extended trading.
While the total number of paid clicks rose, the average price of online ads, or "cost per click," declined 7 percent in the first quarter ended March 31.
Google's ad revenue has been pressured as more consumers access its online services on mobiles devices such as smartphones and tablets, where ad rates are typically lower.
Advertising sales in the first quarter rose 11 percent to $15.51 billion.
The company, under increasing competition for mobile ad dollars from rivals such as Facebook Inc , tweaked its algorithm for mobile searches on Tuesday to favour sites that look good on smartphone screens.
Earlier this month, the European Union accused Google of abusing its dominance of Internet searches to push its own products.
Consolidated revenue rose to $17.26 billion in the quarter, from $15.42 billion a year earlier.
Net income rose to $3.59 billion, or $5.20 per share, from $3.45 billion, or $5.04 per share.
Excluding items, the company earned $6.57 per share.
Analysts on average had expected the company to earn $6.60 per share, on revenue of $17.50 billion, according to Thomson Reuters I/B/E/S.
(Reporting by Lisa Richwine and Devika Krishna Kumar; Editing by Saumyadeb Chakrabarty)