Google has been looking more vulnerable as a technological upheaval nibbles at its dominance in Internet search, while the company also deals with a potentially massive regulatory headache in Europe. But those threats haven't done much to undercut Google's power or profits yet.
Google's first-quarter earnings rose 4 percent to $3.6 billion as the company's Internet-leading advertising network lifted revenue by 14 percent to $17.3 billion from the same time last year. If not for employee stock compensation, Google said it would have earned $6.57 per share, four cents below the estimates among analysts polled by FactSet. Revenue, minus ad commissions, totaled $13.9 billion — about $100 million below analysts' predictions.
It marked the sixth consecutive quarter that Google's earnings have fallen below the analysts' targets that shape investors' expectations. Google's stock nevertheless surged $14.54, or nearly 3 percent, to $572 in extended trading.
The earnings miss stemmed from several factors, including a stronger dollar that depressed overseas revenue and Google's penchant for spending heavily on far-flung projects such as driverless cars, medical research and Internet-beaming balloons that may take years to pay off, if ever.
Google CEO Larry Page believes investing in risky projects that he calls "moonshots" will produce breakthroughs that turn into the company's next big moneymaker while helping make people's lives better, too.
Even as Google sows new fields, the company finds itself trying to adapt to an era of smartphones that is changing the way that people find information and peruse digital content. Millions of different mobile applications have enabled people to go directly to the digital content that they want, instead of searching on Google. People are also searching within favorite apps for specific things and relying on services such as Amazon to find products or Yelp to find restaurants.