Wall Street was disappointed that Google did not make more, but part of its profit was destroyed by the strong US dollar. Some in Wall Street think that the figures could have been a lot worse.
Google has faced challenges in mobile advertising and is racking up more bills as it invests in new businesses.
Revenue for the quarter that ended in March rose 12 percent to $17.26 billion, from $15.42 billion a year earlier. Analysts on average had expected revenue of $17.5 billion.
The rising dollar took a toll on results at Google, which generates about half of its revenue overseas.
Google Chief Financial Officer Patrick Pichette said in a statement that excluding the net impact of foreign currency headwinds, revenue grew a healthy 17 percent.
The number of ads, or paid clicks, rose 13 percent, while the average price of online ads, or “cost per click,” fell seven percent.
Google’s ad revenue was suffering as more consumers accessed its online services on mobiles devices such as smartphones and tablets, where ad rates are typically lower.
Pichette highlighted mobile ads as a key source of revenue growth during the quarter. “We are experiencing real strength in mobile search,” he said.
The contribution of ad revenue from video platform YouTube “continues to grow at a strong rate year-over year,” he added. Brands are embracing YouTube’s TrueView service, where advertisers pay only when users opt not to skip an ad, he said.
Google’s advertising sales in the first quarter rose 11 percent to $15.51 billion.
But Google is facing competition for mobile ad dollars from rivals such as Facebook. The European Union accused Google of abusing its dominance of internet searches to push its own products which might lead to a few headaches in this financial year.
Net profit rose to $3.59 billion from $3.45 billion.