Google Inc on Thursday said its profit in the past quarter dipped slightly from a year earlier, even as revenues for the technology giant showed a sharp increase.
Net third quarter profit fell five percent from the same period a year ago to US$2.8 billion, while revenue grew 20 percent to US$16.5 billion.
Shares in Google tumbled 2.3 percent to US$512.20 in after-hours trading on the results, which disappointed Wall Street.
Finance blog 24/7 Wall Street writer Paul Ausick said Google’s revenue fell short of expectations, and that revenue from “paid clicks” on online advertisements was also disappointing.
Google’s expenses were also higher, led by about US$2.4 billion in costs for data centers.
However, Google chief finance officer Patrick Pichette said the company “had another strong performance this quarter,” adding “we continue to be excited about the growth in our advertising and emerging businesses.”
Pichette said expenses were higher in part because of aggressive hiring by the California tech giant — with some 3,000 jobs added to bring the company’s headcount to 55,000.
“It’s very clearly an extraordinary quarter from a hiring perspective,” he said in a conference call.
While Google has been the undisputed leader in online advertising, it is facing new challenges, notably from firms like Facebook Inc.
Google is expected to slightly boost its market share in online advertising to 32.4 percent this year, while Facebook is set to grab about eight percent, according to the research firm eMarketer.
However, in the US market, Google is losing market share, eMarketer said.
Google earlier this week ramped up its mobile arsenal, upgrading its Nexus line with a new tablet and smartphone, and unveiling its revamped Android software, to be dubbed “Lollipop.”
In addition, the US tech giant announced the launch of a streaming media player for music, movies and videos, which also allows users to play games via the Android TV device.
The new devices give Google and its Android partners a broader portfolio to compete against Apple Inc, which launched two upgraded larger-screen iPhones last month and unveiled new iPads on Thursday.
Newly appointed Google chief business officer Omid Kordestani said the company showed “continued momentum in our core business and exciting innovation in other areas.”
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