Google shares hit as profit dips17 october 2014, 14:34
Google said Thursday its profit in the past quarter dipped slightly from a year earlier, even as revenues for the technology giant showed a sharp increase, AFP reports.
Net third quarter profit fell five percent from the same period a year ago to $2.8 billion, while revenue grew 20 percent to $16.5 billion.
Shares in Google tumbled 2.3 percent to $512.20 in after-hours trading on the results, which disappointed Wall Street.
Paul Ausick at the finance blog 24/7 Wall Street said Google's revenue fell short of expectations, and that revenue from "paid clicks" from online ads was also disappointing.
Google's expenses were also higher, led by some $2.4 billion in costs for data centers.
Chief finance officer Patrick Pichette said however the company "had another strong performance this quarter," and added that "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.
"We continue to attract and hire the best talent from the best colleges and universities around the world," he said in a conference call.
"It's very clearly an extraordinary quarter from a hiring perspective."
While Google has been the undisputed leader in online advertising, it is facing new challenges, notably from firms like Facebook.
According to the research firm eMarketer, Google is expected to slightly boost its market share in online advertising to 32.4 percent this year, while Facebook will grab around eight percent. But in the US market, Google is losing market share, according to eMarketer.
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."
Additionally, 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, which launched two upgraded large-screen iPhones last month and unveiled new iPads on Thursday.
Omid Kordestani, who officially was named chief business officer at Google, said the company showed "continued momentum in our core business and exciting innovation in other areas."