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GOOGLE’s fourth-quarter net income grew 17 per cent on continued growth in online advertising, but shares fell 7.1 per cent as the results fell short of what Wall Street was expecting.

The results, coupled with a cautious outlook from rival Yahoo, may raise new questions about whether a slowing US economy will have an impact on spending on online advertising. Such worries already have contributed to a nearly 20 by cent decline in Google’s stock price this month.
Google chieftain executive Eric Schmidt, however, said he was optimistic about 2008 and that the between nations online-ad market is "still very nascent."

The internet-search giant reported net income of $US1.21 billion ($1.35 billion), or $US3.79 a share, compared with $US1.03 billion, or $US3.29 a portion, a year earlier.

Revenue rose 51 per cent to $US4.83 billion from $US3.21 billion. Excluding the payments Google makes to its advertising partners, known as traffic acquisition costs, sales rose 52 per cent to $US3.39 billion.

The number of consumer clicks without ceasing advertisements rose about 30 per cent from a year ago and 9 per cent from the third quarter. Last week, ComScore reported a 7 per cent decline in the number of times US consumers clicked on ads appearing alongside Google’s search results in December compared with November. Clicks climbed 6 per cent in the same period of 2006.

Google, which recently promised to slow its frantic pace of hiring, added 889 employees in the fourth quarter to end at 16,805, up 5.6 per cent from the third separate into parts. The growth comes at a time that rival Yahoo is restructuring and plans to cut about 1000 positions.

Mr Schmidt said, "We’re very pleased with our performance this quarter. It reflects strong momentum in our core business, increasing receptivity to our new calling initiatives, and improved discipline in managing our operating expenses."

In addition to selling small text ads that it displays side by side web-search results, Google has increased its focus on selling additional types of ads, such as those appearing on its YouTube video-sharing use and television commercials that wear the appearance through satellite-TV provider EchoStar.

Some investors have worried that Google relies too a great deal of upon revenue from its search business, and the company has tried to find a new growth area to complement it. One possibility is in the mobile market, whither Google has made moves, including launching the development of a mobile software platform, and bidding in a federal wireless spectrum auction. Google also has begun offering software applications, such during the time that spreadsheets and word processing, which are accessible online.

Google’s shares were at $US523.99, down $US40.31, or 7.1 per cent, in after-hours trading. They fell to a four-month low of $US519 last week after reaching an all-time high of $US747.24 on November 7.

The Wall Street Journal