Google's revenue fell short of Wall Street's expectations as growth in Internet advertising slowed in the most-recent quarter.
That offset a modest improvement in ad pricing, and sent its shares down about 3% on Wall Street last night.
The total number of ads, or paid clicks, expanded by 17% in the third quarter. That was down from the 25% growth rate that Google saw in the second quarter.
But online advertising rates, which have been mired in a multi-year decline, moderated slightly in the third quarter, declining 2% year-on-year.
That marked an improvement from the 6% decline in "cost-per-click" or CPCs in the second quarter.
Google posted $16.52 billion in revenue for the three months to the end of September, compared to $13.75 billion in the year ago period. Analysts were looking for revenue of $16.57 billion in the latest quarter.
It also ramped up its spending during the quarter. The company increased its headcount by roughly 3,000 employees, contributing to a 46% rise in research and development costs.
The company also announced last night that it had appointed Omid Kordestani its new chief business officer, replacing Nikesh Arora, who had left to join Japan's Softbank.
The chief business officer is considered a key position, overseeing all the company's revenue-generating activities and serving as a liaison to investors and Wall Street.
