Google's profit took a dive in the fourth quarter, which ended Dec. 31, 2008, while revenue grew almost 20 percent, the company announced Thursday.
In a statement, CEO Eric Schmidt said Google performed well despite the difficult economic environment. "Search query growth was strong, revenues were up in most verticals, and we successfully contained costs," he said.
Google reported revenue of $5.70 billion, up 18 percent compared with the $4.83 billion in 2007's fourth quarter. Subtracting the commissions Google pays to its ad network partners, revenue came in at $4.22 billion.
Net income was $382 million, or $1.21 per share, down 68 percent from the $1.2 billion, or $3.79 per share, recorded in 2007's fourth quarter.
On a pro forma basis, which excludes one-time items, net income was $1.62 billion, or $5.10 per share. This excludes expenses such as stock-based compensation and costs related to the settlement of the copyright infringement lawsuits brought by the Authors Guild and the Association of American Publishers (AAP) over Google's Book Search service. It also excludes charges such as write-offs of $1.09 billion of Google investments primarily in AOL and Clearwire.
Google also announced Thursday it plans to offer employees a voluntary, one-for-one stock option exchange intended to create more incentives for employees to remain at Google.
Paid clicks on Google sites and partner sites increased approximately 18 percent compared with 2007's fourth quarter.
Google finished the quarter with 20,222 full-time employees, up from 20,123 full-time employees as of Sept. 30, 2008.