By Jon Swartz
SAN FRANCISCO - Google got a belated gift from the holiday-shopping season.
In its traditionally strongest quarter, the Internet search giant hauled in $2.89 billion, or $8.62 a share in its fourth quarter, compared with $2.71 billion ($8.22 a share) a year ago. Excluding certain items, Google reported a profit of $10.65 a share, exceeding analysts' estimates.
Revenue was $11.34 billion, up from $8.13 billion in the same period a year ago. For its fiscal year, Google hit $50 billion for the first time.
"In today's multiscreen world, we face tremendous opportunities as a technology company focused on user benefit," Google CEO Larry Page said in a conference call.
The financial surge sent Google shares up nearly 5% in after-hours trading, to $736.40, on Tuesday.
Google highlighted a strong day for tech results. IBM reported solid profits on flat revenue in its fourth quarter. Its net income of $5.8 billion, or $5.13 per share, topped analysts' forecasts.
Still, Google's results were tempered by an unnerving trend: The price advertisers pay Google each time someone clicks on an ad dipped 6% from the year-ago quarter -- the fifth-straight quarter that so-called cost-per-click prices have declined, year over year.
Results for the search behemoth, on the heels of a third quarter in which earnings tumbled, gave investors a better sense of how the growing popularity of smartphones and tablet computers are affecting prices in the digital-advertising market.
Like Facebook, Zynga and others, Google faces a vexing issue: As millions of people eschew conventional PCs for mobile devices, advertisers pay Google lower rates for search ads on smartphones and tablet computers than they do for ads found through searches on desktop PCs and laptops.
So far, advertisers haven't been willing to pay as much because of the disparity in screen sizes.
But Google's fourth-quarter numbers offered hope. The company's advertising rates fell less than in previous periods. Google's earnings have risen overall, because the total number of clicks on the ads -- for which Google is often paid -- have steadily climbed.
Google dominates the mobile-ad market in the U.S., with about 55% of the $2.6 billion market in 2012, according to researcher eMarketer. Google accounts for more than 41% of all digital ad revenue in the U.S., eMarketer estimates.
"When you strip away all the fun-to-talk-about stuff, Google remains a one-trick pony -- and it's a damned good trick," says Jonathan Yarmis, an independent tech analyst. "All of the other stuff they do -- Android, Nexus, Docs -- is trivial and serves only to feed the data and advertising engine."