Google shares hit hard

Google Inc. shares fell more than eightper centon Friday, a day after the company produced quarterly revenue and profit that missed analysts' expectations.

The stock fell $48.40 US to $515.90 US on Nasdaq.

The earnings miss was also coupled with news Friday that Microsoft proposed a $44-billion US takeover bid for Yahoo.

The internet search leader said after the close of trading Thursday that it made $1.21 billion US, or $3.79 per share, in the fourth quarter,up 17 per cent from $1.03 billion, or $3.29 per share, for the same period in 2006.

Google said it would have earned $4.43 cents a share, if not for stock awards given to its employees. That figure was one cent below the average estimate by analysts surveyed by Thomson Financial.

Revenue jumped by 51 per cent to $4.83 billion US from $3.21 in the same quarter a year earlier.

The company's net revenue missed analysts' estimates by about $60 million, or just under two per cent.

There is growing concern that Google won't be able to sell as much online advertising its main source of profit as consumers reduce their spending amid ominous signs of a recession in the U.S.

The company's fourth-quarter profit increase was the smallest in its 14 quarters as a publicly held company. It was just the third time that Google's earnings failed to exceed analysts' estimates.