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Google revenues fall short of analysts’ expectations

Mixed results for the first-quarter.

Google has reported revenues of $14bn for the first quarter of 2013 compared to analysts’ expectations of $14.2bn.

The search engine giant, however, improved profits by 15 per cent to $11.58 per share on a pro forma basis, beating analysts’ expectations.

During the quarter, revenues from Motorola Mobile’s hardware business were $1.02bn, while net revenues from core internet operations were $9.99bn.

Patrick Pichette, CFO of Google said that the company is seeing a lot of progress in transitioning Motorola’s businesses since it was acquired in May 2012, but also warned that “results from that segment will continue to be variable.”

Pichette defended the company’s purchase of businesses with lower operating margins than Google’s provided they contribute to higher revenues and profits for Google.

“If it adds $2bn to the bottom line, what’s not to like?” he said. “There’s this magical relationship, as well, that continues to enhance our offerings.”

Larry Page, CEO of Google, hinted that the company is looking to fix key weaknesses of today’s smartphones and tablets, from short battery life to fragile screens. He said: “If your kid spills a drink on your tablet, the screen shouldn’t die. And when you drop your phone, the screen shouldn’t shatter.”

The internet company launched a new tool to help advertisers purchase ads on mobile devices and desktop computers in one streamlined process.

Nikesh Arora, chief business officer of Google, said that so far, 1.5m campaigns have been folded into the new system, called Enhanced Campaigns, while the rest are planned to migrate by the end of the second-quarter of 2013.

Google said that the cost per click declined by 4 per cent in the first-quarter, compared to the 6 per cent fall in the fourth quarter of 2012, and a 15 per cent fall in the third-quarter.