Google drops as earnings disappoint

GOOGLE shares dropped nine per cent in after-hours trading last night on the back of worse than expected results from the technology giant.

Shares sunk to around $583 despite the firm announcing an increase in net revenue to $8.13bn (£5.25bn) for the fourth quarter, compared to $6.37bn a year earlier.

Analysts had wanted more from the firm after it beat Wall Street estimates in the past eight quarters.

The majority of Google’s income comes from its Adsense programme and although the number of clicks on search adverts increased sharply during the last three months of the year, the money that Google charges advertisers for the ads decreased eight per cent.

Executives told investors on a conference call that foreign exchange movements were also to blame for the earnings miss.

The Californian company has spent heavily on portable devices, turning its Android operating system into the market leader for mobile phones.

Operating expenses increased two percentage points to 32 per cent of revenue during the fourth quarter.

But the firm was tight-lipped about its plans for Motorola, which it bought for $12.5bn last year.