Google's revenue grew 15% in the fourth quarter but fell short of Wall Street's target on declining online ad prices and unfavorable foreign exchange rates.
Google's advertising revenue has come under pressure as more consumers access its online services on mobile devices such as smartphones and tablets, where ad rates are typically lower.
The growing popularity of mobile devices has made social network Facebook a greater threat in the battle for advertisers.
Facebook reported earlier this week that mobile ads on its network doubled year-over-year during the fourth quarter.
Google said last night that the average price of its online ads, or "cost per click," decreased 3% year-over-year in the fourth quarter, while the number of consumer clicks on its ads increased 14%.
Revenue in the three months to the end of December totalled $18.10 billion, compared to $15.71 billion the same time the previous year. Analysts had been expecting revenue of $18.46 billion.
Google's chief financial officer Patrick Pichette said in a statement that revenue grew "despite strong currency headwinds."
The company's net income rose to $4.76 billion, or $6.91 per share, from $3.38 billion, or $4.95 per share, a year earlier.
Adjusted earnings per share of $6.88 also missed analysts' expectations of $7.11.
