Google's third-quarter earnings fell as the search engine giant had a drop in paid clicks. It also added almost 3,000 more employees while raising spending on innovation and data centers. In addition Google's tax bill rose 40% to $859m related to Motorola patents.
Google reported consolidated revenues of $16.52bn for the quarter ended September 30, 2014, an increase of 20% compared to the third quarter of 2013.
Traffic acquisition costs (TAC) in the quarter totaled $3.35bn, or 23% of advertising revenues.
Google earnings of $2.81bn, or $4.09 per share compared to income of $2.97bn, or $4.38 per share, at the same time last year.
Google said it made changes in the third quarter that reduced some paid clicks that were “lower quality,” Patrick Pichette CFO said on a conference call. However, the changes improved the price paid for those clicks on mobile devices, he added.
“We continue to be excited about the growth in our advertising and emerging businesses,” Pichette said.
Clicks on the sites Google owns, like Google.com, continued to grow at a rate of 24%. However, clicks on Google ads on other sites rose only 2% from the prior year.