Google, owner of the world's most popular search engine, reported first-quarter profit that fell short of some analysts' estimates as ad sales didn't grow enough to satisfy investors. The shares fell in late trading.
Net income rose 37 per cent to $1.96 billion, or $6.06 a share, from $1.42 billion, or $4.49 a share, a year earlier, the company said today in a statement.
Leaving out costs such as stock-based compensation, profit was $6.76 a share.
Google, grappling with rising competition from companies such as Microsoft, is ramping up investments to buoy its competitive edge.
The company, which announced six acquisitions this year, may not be adhering to the same financial discipline it had during the financial crisis, said Colin Gillis, an analyst at BGC Financial LP in New York.
"Their focus has scattered out a bit," said Mr Gillis.
"They are spending more."
Excluding revenue passed on to partner sites, sales of $5.06 billion compared with the average $4.95 billion prediction. Estimates ranged as high as $5.12 billion.
Google, based in Mountain View, California, fell 3 per cent in after-hours trading to $577.65.
It had climbed $6.30 to $595.30 at 4 pm New York time on the Nasdaq Stock Market.
The shares have dropped 4 per cent this year.
While Google has maintained its lead in search, its share declined to 65.1 per cent in March from 65.5 percent a month earlier, according to ComScore Inc in Reston, Virginia.
Bloomberg