Google last night reported higher quarterly revenue and profit as rising online ad volume offset a hit from the strong dollar.
While revenue and profit missed the forecasts of Wall Street analysts, many investors had been bracing for a weaker report, analysts said.
The company has faced challenges in mobile advertising and is running up more expenses as it invests in new businesses.
Revenue for the quarter that ended in March rose 12% to $17.26 billion, from $15.42 billion a year earlier. Analysts on average had expected revenue of $17.5 billion, according to Thomson Reuters.
The company said last night that it net income rose to $3.59 billion, or $5.20 per share, from $3.45 billion, or $5.04 per share.
Excluding items, the company earned $6.57 per share, just missing analysts' forecast of $6.60.
The rising dollar took a toll on results at Google, which generates about half of its revenue overseas.
"Excluding the net impact of foreign currency headwinds, revenue grew a healthy 17% year on year," Google's chief financial officer Patrick Pichette said.
The number of ads, or paid clicks, rose 13%, while the average price of online ads, or "cost per click," declined 7%.
Google's ad revenue has been pressured as more consumers access its online services on mobiles devices such as smartphones and tablets, where ad rates are typically lower.
The contribution of ad revenue from video platform YouTube continues to grow at a strong rate year-over year, the company said.
Brands are embracing YouTube's TrueView service, where advertisers pay only when users opt not to skip an ad, he said.
Google's advertising sales in the first quarter rose 11% to $15.51 billion.
The company, under increasing competition for mobile ad dollars from rivals such as Facebook, tweaked its algorithm for mobile searches on Tuesday to favour sites that look good on smartphone screens.
Earlier this month, the European Union accused Google of abusing its dominance of Internet searches to push its own products.
