Google shares plunge on underperforming profits

New York – Remaining profitable but not as profitable as investors has hoped, Google saw its shares fall 8 percent to 10 percent in after-hours trading today after the company posted fourth quarter net revenues of $8.13 billion, which was nevertheless a year-on-year increase of nearly 30 percent, according to Reuters.

In after hours trade, the comapny's shares were at 583.64. Analysts polled by Reuters had been looking for an even greater revenue increase of $8.4 billion.

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The company had exceeded Wall Street expectations for eight consecutive quarters, according to the news agency.

"Expectations had got ahead of themselves for Google, largely because investors don't have a good feel for what happens outside the U.S.," Stifel Nicolaus analyst Jordan Rohan was quoted as saying. He said he believed underlying demand in Germany and other European countries had been weak. "North America has remained strong, but there are parts of the world where there's a lot of economic pressure."

The per-click cost of Google search ads declined by 8 percent from the third quarter and was also 8 percent lower than the same period in 2010.

Bloomberg reported that profit before certain costs was at $9.50 a share, missing an estimate of $10.50. The financial news agency said the company gets more than half of its revenues from activities outside the US, which accounted for 53 percent of revenues in the fourth quarter, down form 55 percent in the third.

However Bloomberg reported that in December Google's share of the US Internet search market rose a half percent over November to 65.9 percent. Microsoft, which maintains the Bing service, held on to 15.1 percent.

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According to Wired Magazine, Google CEO Larry Page told reporters in a conference call today that the company had sharpened its focus by canceling unsuccessful product lines.

"We need to make hard choices about where to focus our efforts," was quoted as saying. ”This means we can double down on the really big bets we have made, like Android, Chrome, Google+ and YouTube.”