Google last night reported disappointing quarterly results on rising capital spending and costs for acquiring advertising customers.
Revenue rose 51 per cent to $4.827 billion, just shy of the $4.83 billion, on average, analysts had forecast.
Google's fourth-quarter net income rose to $1.21 billion, or $3.79 per diluted share, from $1.03 billion, or $3.29 per diluted share, in the year-earlier quarter. Excluding special items, earnings per share were $4.43, short of analysts' average forecast of $4.47.
A rising level of payments to affiliated sites that deliver Google ads, called traffic acquisition costs, also surprised some.
The disappointment was especially pronounced given the web-search leader's record of beating expectations, analysts said. It was only the third time in 14 quarters as a public company that Google failed to top Wall Street profit forecasts.
But Google executives underscored their belief that there were no signs that a weakening US economy so far was hurting its own results and that they expect advertisers to maintain spending with Google even if they slash overall ad budgets.
"We have not yet seen any negative impact from the rumors of future recessions," chief executive Eric Schmidt said.