Profits were $3.45bn, but investors¹ are preoccupied² by Google's inability to maintain advertising³ prices.

 

A widely watched measure, the average "cost per click", was down 9% from a year earlier.

 

Another weak spot highlighted in the report was the firm's discounted sale of Motorola Mobility⁴ to Lenovo.

 

Google sold the smartphone maker⁵ to Lenovo in January for close to $3bn, after paying $12.5bn for the firm less than two years ago.

 

Despite investors' reaction, Google's chief executive, Larry Page, was upbeat: "We completed another great quarter," he said in a statement.

 

"We got lots of product improvements done, especially on mobile. I'm also excited with progress on our emerging businesses."

 

However, Google continues to struggle with its ability to charge advertisers higher prices for mobile ads, which are increasingly important with more and more consumers accessing Google's browser⁶ through their smartphones.

 

Advertisers have proven reluctant to pay as much for ads on mobile screens compared to Google's bread-and-butter desktop⁷ ads, which have been the main revenue generator⁸ at the firm.

 

Rates for mobile ads can be half as much as on personal computers, according to Needham & Co analyst⁹ Kerry Rice.

 

However, Google expects mobile ad prices to catch up with PCs eventually as it becomes easier for consumers to buy products using mobile devices, Google chief business officer Nikesh Arora said.

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