Google Inc.'s fourth-quarter sales and profit missed Wall Street estimates as the Internet company's advertising business faced more competition on mobile devices.
Revenue rose 6.9% to $14.5 billion, the company said Thursday, missing analysts' average projection for $14.7 billion, according to estimates compiled by Bloomberg.
Chief Executive Larry Page is battling Facebook Inc. and other Web companies that are seeking to lure away users and advertisers on tablets and smartphones. Marketers are also paying less for mobile ads, driving fees lower within Google's online-ad business. As a result, the average price of ads fell 3% in the quarter, following a decline of 2% in the previous period.
"People wanted to see that improve," said Colin Gillis, an analyst at BGC Partners in New York.
The shares of Mountain View, Calif.-based Google were little changed in extended trading after the release of earnings. The stock advanced less than 1% to $513.23 at the close.
Fourth-quarter net income rose 41% to $4.76 billion, or $6.91 a share, from $3.38 billion, or $4.95, a year earlier. Profit, excluding some items, was $6.88 a share, compared with analysts' average projection for $7.11.
Google's share of the online-ad market is coming under pressure as more users spend time on smartphones and tablets. The company, which has introduced services encouraging marketers to use its mobile features, saw its share of global mobile-ad revenue decline to 41% in 2014, from 47% in 2013, while Facebook's rose to 18% from 17%, according to EMarketer Inc.
"Mobile is a big concern of investors," said Robert Peck, an analyst at SunTrust Robinson Humphrey Inc. "What happens to Google's dominance as it gets more competition as the world goes mobile?"