(Reuters) - Google's Internet business revenue grew 19 percent in the first quarter, falling short of Wall Street targets, as the price of its online ads continued to decline.
The number of "paid clicks" by consumers on Google's ads increased by 26 percent year-on-year in the first quarter, while the average "cost per click" declined 9 percent. Google's core Internet business revenue was $15.42 billion in the first quarter, versus $12.95 billion in the year-ago period.
Google posted $3.45 billion in net income, or $5.04 per share, in the three months ended March 31, compared to $3.35 billion, or $4.97 per share, in the year-ago period. Excluding certain items, Google said it earned $6.27 per share.
Google reported a $198 million net loss from "discontinued operations," which includes the Motorola smartphone business. Google announced plans in January to sell the money-losing business to China's Lenovo Group for $2.91 billion.
The number of "paid clicks" by consumers on Google's ads increased by 26 percent in the first quarter, disappointing some analysts that had hoped for stronger volume growth. And the average "cost per click" declined 9 percent, extending a downward trend as mobile advertising, typically cheaper than traditional online ads, make up a bigger slice of its business.
"It's an average quarter from a great company," said BGC Partners analyst Colin Gillis. "It's the same old story. Paid clicks were a little lighter than people might have hoped, CPC declines were a little higher than people would have liked, expenses continued to rise."
Operating income slipped to 32 percent of revenue on an adjusted basis, from 34 percent in the year-ago period.