MOUNTAIN VIEW -- Google reported better-than-expected fourth-quarter revenue Thursday but missed Wall Street projections for profit.

Revenue was $16.86 billion, up 17 percent in the fourth quarter compared with a year ago, and profit was $3.4 billion, up 17 percent compared with the year before.

But the company's earnings of $9.90 a share, or $12.01 after subtracting one-time charges, fell short of Wall Street projections as the average cost of search ads declined by 11 percent.

Google's average "cost-per-click" continued to fall as advertisers moved to mobile devices where ads are cheaper. But overall, the number of paid clicks for Google ads rose about 31 percent from the year before, the company reported Thursday.

Shares of Google closed at $1,135.39, up 2.57 percent, then jumped more than 4 percent in after-hours trading to about $1,183.

"As soon as the (earnings) call started, the stock started to come up more," said Martin Pyykkonen of Wedge Partners. "Google's still a great story that for now continues to be predictable. There wasn't anything out of the numbers that you could call a new negative."

Google reported its latest earnings one day after announcing it was abandoning its unprofitable Motorola phone division for nearly $3 billion -- just 20 months after buying it.

Google's $12.4 billion purchase of Motorola Mobility represented its biggest deal ever as it tried to amass patents while producing high-end, Android-based units to compete with Apple's iPhone.


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"The loss that Motorola reported was more than double what they experienced in the prior year's fourth quarter," said Josh Olson of Edward Jones. That makes Wednesday's announcement "look even better," he said. "We thought it was a good deal for Google (Wednesday) and we think it looks even better today."

Like other analysts, Olson said he is not alarmed that Google's costs-per-click continue to fall as the company offers advertisers deals for smartphone ads.

"We continue to see this shift to the mobile platform, which is getting lower pricing than we see on the traditional desktop ad platform," Olson said. "Ultimately, the pricing will come more in line with what they get for the desktop and for the tablet. There is always going to be some level of discount there. But we do think it will improve. Overall, ad revenue was really pretty solid."

Google also announced an April 2 date to distribute shares of its Class C, nonvoting capital stock, which will ensure that control of the company remains with co-founders Larry Page and Sergey Brin.

In an appeasement to nonvoting shareholders, Google announced that its Class C shares will trade under the current GOOG ticker symbol, while its Class A voting shares will have a new symbol of GOOGL.

Contact Dan Nakaso at 408-271-3648. Follow him at Twitter.com/dannakaso.