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Google profits trigger concerns

Google profits trigger concerns

Google's profits rose by less than expected between April and June, raising concerns of a slowdown in the online advertising market. The internet giant posted a 35% rise in second quarter net profit to $1.25bn (£626m) - slightly below forecasts. The company said its business had held up well despite a more challenging economic environment. But investors, used to Google outperforming, sent the firm's shares 8% lower in US after-hours trading. "There's the initial shock of this being the best company in the space and it just fell short, said Colin Gillis, analyst at Canaccord Adams. 'Challenging environment' Google reported a 39% rise in revenue to $5.37bn in the three months to 30 June. "Strong international growth as well as sustained traffic increases on Google's web properties propelled us to another strong quarter, despite a more challenging economic environment," said Eric Schmidt, Google's chief executive. The company blamed its below-forecast performance on lower returns from investing its $12.7bn cash pile as a result of volatile interest rates. The number of paid clicks on websites operated by Google and its partners fell 1% from the first quarter. Stanford Group analyst Clayton Moran said it was evidence "there is a slowdown in internet advertising that's affecting Google". Google employed another 448 people during the quarter - the fewest hired since the fourth quarter of 2004.

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