Shares of Google Inc
The company also announced a stock split designed to preserve the control of co-founders Larry Page and Sergey Brin over the world's No. 1 Web search engine.
We are less concerned by this decline than others as we view cost per clicks as only part of the revenue story, Barclays analyst Anthony DiClemente said in a note.
(We) are of the belief that CPCs will improve over time as Google's core search business will monetize well on mobile devices.
Cost-per-click fell 12 percent from the year-ago period, following an 8 percent drop during the fourth quarter, with Google attributing the slippage to a shift to cheaper mobile advertising rates among other factors.
Paid clicks, however, jumped 39 percent during the period.
Analysts said the lack of visibility around Google's plans for the recently acquired Motorola Mobility Holdings
At least nine brokerages raised their price targets on Google's stock.
These results bode well and keep us positive on Google long-term, all the while recognizing that the lack of clarity around MMI is likely to remain an overhang on the stock short-term, Jefferies & Co analysts, led by Youssef Squali, said in a note to clients.
Shares of the company rose $4 to $655 in trading before the bell. They closed at $651.01 on Thursday on the Nasdaq.
The stock, which fell 9 percent after Google's fourth-quarter results on Jan 19, has risen 2 percent since then.
(Reporting by Sayantani Ghosh in Bangalore; Editing by Saumyadeb Chakrabarty)