Google fourth quarter earnings rise despite Motorola woes

Written by Associated Press | San Francisco | Updated: Jan 24 2013, 06:30am hrs
Google eked out slightly higher earnings in the fourth quarter, despite a financial drag caused by the internet search leaders expansion into device manufacturing and decline in digital ad prices as more people gaze into the smaller screens of smartphones.

The results announced on Tuesday pleased investors, helping to lift Googles stock by nearly 5% in extended trading.

More advertising poured into Google during the holiday shopping season, fueling a moneymaking machine that has steadily churned out higher profits since the company went public in 2004.

Googles fourth-quarter ad revenue totaled $12.1 billion, a 19% increase from the previous year. Some of that money, though, has been shifting away from personal computers as advertisers try to connect with an expanding audience that relies on smartphones and tablet computers to reach Googles search engine, email and other online services. By some estimates, about one-fourth of Googles search requests are now coming from mobile devices.

Google earned nearly $2.9 billion, or $8.62 per share, during the fourth quarter. That compared to net income of $2.7 billion, or $8.22 per share, at the same time last year.

It proved to be a difficult quarter to decipher because of an accounting quirk and the additions of new business lines that muddied the comparisons with the previous year.

For instance, Google Inc. didnt own Motorola Mobility in 2011, having completed its $12.4 billion acquisition of the troubled handset maker eight months ago.

Whats more, Google is bringing in more revenue from tablet computers, which it began selling under the Nexus brand during the final half of last year.

Things were further complicated by Googles recent agreement to sell a part of the Motorola Mobility division that makes cable TV boxes. That division is now accounted for as a discontinued operation whose revenue wasnt booked in the latest quarter, even though it will remain a part of Google until the $2.35 billion sale is completed later this year.