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Google’s net revenues surged 67 per cent in the final quarter of last year, ahead of estimates. The company continued to steal market share from other web search engines and found ways to squeeze higher returns from its advertising system, according to figures released on Wednesday.

At the same time, the internet juggernaut signalled it would continue to invest heavily in new services and its technology platform, pointing to continued pressure on its underlying profit margins, which slipped slightly in the latest quarter.

However, the company’s executives also spoke optimistically about progress from a range of services that could give it a foothold in new markets, including YouTube and the Google Checkout service.

Although Google’s latest revenues and earnings beat most analysts’ estimates, they failed to live up to the informal “whisper numbers” that called for stronger growth.

The company’s shares, which had risen strongly in the days leading up to its earnings report, slipped 1.4 per cent to $494.28 in early Wall Street trading on Thursday.

Pointing to Google’s international expansion, Eric Schmidt, chief executive officer, said: “We are growing share in almost every country.”

He added that, while Google was displaying fewer adverts per search to its users, it was benefiting from higher quality and better targeted advertising.

In responding to Wall Street’s requests for more information about the progress of its business, Google for the first time reported the growth rate of its “paid clicks”, or the instances in which users click on links that generate revenue for Google.

These clicks grew 61 per cent from a year before, though the 22 per cent growth from the third quarter of last year was lower than the company’s 19 per cent revenue growth.

The difference reflected factors including the growth of advertising on social networks and in newer markets overseas, where advertising rates were lower, said Jonathan Rosenberg, head of product development.

Google’s net revenues, after deducting the traffic acquisition costs it pays to other companies, jumped by 72 per cent in the latest quarter to $2.34bn, compared with the $2.2bn Wall Street had expected.

Net income nearly tripled to $1.06bn, or $3.29 a share.

After deducting the effects of a one-off tax benefit and stock compensation expenses earnings per share were $3.18, compared with expectations of $2.92.

Copyright The Financial Times Limited 2017. All rights reserved.
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