Google Reports Disappointing Revenue

By Tess Stynes 

Google Inc. reported disappointing revenue growth in the holiday quarter amid further indications of slowing growth in its maturing search-advertising business.

The amount Google receives per ad click is decreasing as the number of clicks increases. Clicks on advertiser links next to Google's search results increased 14% from a year earlier, but the amount Google got paid per click fell 3% from a year earlier.

Fear of slowing revenue growth in Google's core search advertising business matures has been a key reason why the company's shares have fallen in recent months. Google has two faster-growing businesses in YouTube and the Google Play Store, but those units remain small compared with search.

For the latest period, Google said revenue rose to $18.1 billion from $15.7 billion, but it fell below the $18.46 billion recently expected by analysts polled by Thomson Reuters.

Overall, Google reported a profit of $4.76 billion, or $6.91 a share, up from $3.38 billion, or $4.95 a share, a year earlier. Excluding stock-based compensation, discontinued operations and other items, per-share earnings rose to $6.88 from $6.70.

Analysts had expected earnings of $7.11 a share.

Shares of Google fell 3.6% in recent after-hours trading.

Write to Tess Stynes at [e-mail]

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