Google said earnings rose 17 percent in the fourth quarter, to $1.2 billion, as the number of user clicks on paid ads surged 30 percent. Revenue grew 51 percent, to $4.8 billion.

But the results fell short of forecasts, suggesting that the slump in consumer spending may be spreading and dampening online advertising. Shares of Google tumbled more than 8 percent in after-hours trading.

Excluding traffic acquisition costs of $1.4 billion, revenue for the fourth quarter would have been $3.4 billion.

Google spent $678 million in the fourth quarter on server farms and other equipment. "We expect to continue to make significant capital expenditures," the company said in a statement.

"We're very pleased with our performance this quarter," said Eric Schmidt, chief executive of Google. "It reflects strong momentum in our core business, growing receptivity to our new business initiatives, and improved discipline in managing our operating expenses."
 
Vishesh Kumar of TheStreet.com noted earlier today that investors have figured out that data about growth in search are not an accurate predictor of revenue. This quarter's results represents Google's first test in a recession environment.

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