Google profit fails to excite

City A.M. Reporter
<!--StartFragment--> GOOGLE&rsquo;S quarterly profit beat Wall Street expectations, but the weak economy and slump in advertising spending took a toll on sales growth and the price of its search ads.<br /><br />Shares in Google, led by chief executive Eric Schmidt, fell 3 per cent after the results which exceeded average forecasts but failed to live up to the heightened expectations of investors following microchip firm Intel&rsquo;s strong earnings earlier this week. Stock closed up 1 per cent at $443.<br /><br />&ldquo;They did decently, but obviously it's not high enough for the Street,&rdquo; said Lame Pour, an analyst at Primary Global Research. Google&rsquo;s sales in the second quarter rose 3 per cent to $5.52bn (&pound;3.35bn), compared with the average analyst forecast of $5.49bn.<br /><br />Excluding traffic acquisition costs &ndash; the portion of revenue that is shared with Google partners &ndash; revenue was $4.07bn. &ldquo;People were hoping they would see something around the $4.3bn range,&rdquo; said Brigantine Advisors analyst Colin Gillis. &ldquo;Google is changing from a top line growth story to an earnings expansion story,&rdquo; he added.<br /><br />The company also benefited from a lower income tax rate of 20 per cent, compared with the first quarter&rsquo;s 25 per cent. <!--EndFragment-->