San Francisco: Google Inc. is thriving again, and feeling so good about the economy that it's spooking investors.
The company's first-quarter earnings exceeded analyst estimates and its revenue growth accelerated for the third consecutive quarter. More people clicked on internet ads powered by its dominant search engine.
But the results released Thursday didn't impress investors, who appeared worried that the strengthening economy may cause Google to abandon some of the financial discipline that it exerted during the recession. The company's shares tumbled almost 5 per cent in extended trading.
Investors also might have been unnerved to see a decline from the previous quarter in the prices paid for Google's ads. The average first-quarter price fell 4 per cent from the fourth quarter. But it was 7 per cent above the average rate at the same time last year.
The architect of Google's cost cutting, Chief Financial Officer Patrick Pichette, left little doubt the company is loosening its pursestrings again.
"We are continuing to invest heavily in people, products and acquisitions," Pichette told analysts in a Thursday conference call.
Pichette, who joined Google in 2008, steered the conference call, filling Google CEO Eric Schmidt's usual role. It marked the first time that Schmidt hasn't been on Google's earnings conference call since the company went public in August 2004.
The decision to have Schmidt sit out the call was disclosed several weeks ago. Pichette advised analysts not to read anything into the switch, which he said was aimed at focusing the discussion on Google's finances.
