Earnings Report: Advertisers Flocked to Google Over Holidays

On Tuesday, Google reported fourth-quarter earnings which beat expectations despite the fact that revenue didn’t necessarily wow Wall Street.

Google’s net income was $2.89 billion during the final three months of 2012, which is a small improvement upon net income of $2.71 billion during the same quarter of 2011.

Helping to deliver that strong performance was the jolt in holiday ad spending by retailers.

Although Google, characteristically, didn’t provide copious performance details about specific advertising channels and categories, Google’s Chief Business Officer Nikesh Arora confirmed that Google’s new product listing ads were very strong over the holiday quarter.

Average cost-per-click declined 6 percent from a year ago, but increased 2 percent over the third quarter of 2012.

Google executives told analysts on a conference call that the company had focused on improving the metric — shoring up margins — while lowering the overall growth rate of paid clicks in the holiday quarter.

“The core business is a great business and the fourth-quarter is always a time for Google to shine,” Colin Gillis, an analyst at BGC Financial, tells CNBC. “However, Motorola is still losing money and click rates still declined. They only declined 6 percent, but go back four or five quarters and click prices were improving. So mobile is still pressuring click prices.”