Google shares hit

Search engine behemoth Google revealed that year-on-year fourth quarter net income has increased by more than 14 per cent to nearly $1.2 billion (£0.6 billion).

The company's latest statement also showed that full-year net income increased by about 27 per cent to $4.2 billion (£2.1 billion).

Total revenue in 2007 was $16.6 billion (£8.4 billion).

"We're very pleased with our performance this quarter," said Eric Schmidt, chief executive of Google in the quarterly update.

"It reflects strong momentum in our core business, growing receptivity to our new business initiatives, and improved discipline in managing our operating expenses," he said.

The company, which generates most of its revenue from its advertising and affiliated sites, is widely recognised as the world's most popular and largest search engine.

Despite the clear increase in profits, however, the results left many investors on Wall Street unimpressed.

The web portal's capital expenditures were well above forecasts, while ad sales growth in the UK, Google's second-largest next to the US, reportedly slowed to five per cent, worrying investors and leading them to sell shares.

Addressing concerns about a slowdown in the US economy as a result of the mortgage crisis, Mr Schmidt told investors in a conference call: "We have not seen any impact from the rumours of future recessions."

Diluted net income per share was $4.43 (£2.21), just four cents (2p) short of forecasts predicting $4.47 (£2.23).

Google's shares climbed almost three per cent in regular trading to $564.30 (£282.15), but down to $524.87 (£262.43) in after-hours trading on the Nasdaq composite index yesterday.

The popular stock peaked at nearly $750 (£375) in early November, after starting around $475 (£237.5) last February.