Google misses earnings expectations

Google (GOOG) late Thursday reported net income of $1.84 billion, or $5.71 a share, a 24% increase from the $1.49 billion, or $4.66, it earned a year earlier.

Excluding items, earnings were $6.45 per share, missing expectations for $6.52. It was Google's first earnings miss since the second quarter of 2008.

Excluding revenue passed on to partner sites, sales were $5.09 billion, topping expectations for $4.98 billion.

Google's shares slumped $26.14, or 5.3%, to $467.88.

Google remains "best positioned to benefit from the recovery in ad spending and overall growth in Internet usage," FBR Capital's Heath Terry wrote in a note to clients. Terry cautioned that "spending growth, regulatory scrutiny, and growing competition on multiple fronts remain risks."

The company said its paid clicks, or the number of times that users click on its advertisements and generate revenue, rose 15% from the second quarter of 2009, flat with the first quarter. Analysts had been looking for an increase of between 15% and 17%.

The prices paid for clicks on Google's advertisements rose 4% from the same quarter last year.

Google also said it added 1,184 employees during the second quarter, its most active hiring period since the first quarter of 2008.