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Google results trump expectations

San Francisco - Google's quarterly results beat Wall Street's expectations as the internet search giant expanded its mobile business while keeping ad-rate slides in check, offsetting deepening losses from Motorola.

Shares of Google rose 6% to $941.25 in after-hours trading on Thursday after it reported a 23% rise in revenue from its internet business, excluding fees paid to partners, of $10.8bn in the third quarter.

"They were able to grow their revenue pretty substantially, particularly in their own websites, in spite of having lower overall ad prices," said JMP Securities analyst Ronald Josey.

Google's business, like rivals Facebook and Yahoo, has come under pressure as more consumers access its online services on mobile devices such as smartphones and tablets, where advertising rates are lower than on PCs.

Paid clicks increased 26% year-on-year during the three months ended September 30, while the average cost-per-click - the price that marketers pay Google when consumers click on their ads - decreased 8%.

"That's the key story, their ad volume growth is outpacing the decline in cost-per-clicks," Josey said.

On Thursday, co-founder and CEO Larry Page told analysts he will no longer be joining the company's regular earnings conference call. He did not give a reason.

Page, who with Sergey Brin conceived of what is today the world's most-used internet search engine, is not known for assiduously courting Wall Street investors. And this year, Page revealed that his vocal cords are partially paralysed as the result of a rare medical condition.

Bottom line beat

In terms of quarterly results, Google also managed to handily beat Wall Street's expectations.

It earned $2.97bn, or $8.75 per share in the three months ended Sept. 30, compared to $2.18bn, or $6.53 per share, last year.

Excluding certain items, Google said it earned $10.74 per share, compared to the $10.34 that analysts were expecting, according to Thomson Reuters I/B/E/S.

Google's consolidated revenue of $14.89bn compared with the $14.79bn average analyst estimate.

Operating loss at Motorola, Google's mobile phone business, totalled $248m during the third quarter, compared to a loss of $192m in the third quarter of 2012.

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