Updated: Google Miss Sends Stock Down 9 Percent On Cost-Per-Click Questions

Google (NSDQ: GOOG) missed analyst expectations for earnings per share during the fourth quarter, sending its stock plunging in after-hours trading Thursday. The company had been expected to produce earnings per share of $10.49, but it chalked up just $9.50 in earnings per share excluding special items and also missed revenue targets.

It’s important to note that Google has never provided its own earnings estimates on a quarter-to-quarter basis; these estimates are those of financial analysts that follow the company. They were looking for more than $2.71 billion in GAAP (generally accepted accounting principles) net income, which was a six percent increase compared to net income of $2.54 billion a year ago.

Google’s revenue growth was strong, up 25 percent to $10.58 billion before traffic-acquisition costs are factored in. Analysts tend to focus on that latter number, and they were expecting net revenue of $8.41 billion, as compared to the $8.13 billion in net revenue it otherwise recorded.

Without directly acknowledging the estimates of financial analysts gathered on Google’s earnings conference call, CFO Patrick Pichette noted the negative effects of currency fluctuations and an impairment charge related to a previous Google investment in Clearwire (NSDQ: CLWR) on Google’s earnings during the quarter. That might account for much of the disconnect between Google’s performance and the expectations of the financial community.

Analysts peppered CEO Larry Page with so many questions about the eight percent decline in the important cost-per-click metric–the average cost that advertisers pay Google per a click on their ads–that he half-jokingly asked for a break from discussion of the issue. Google doesn’t think it’s that big a deal: overall clicks increased as the result of site improvements, said Susan Wojcicki, senior vice president of advertising, who also said this was positive for both Google’s revenue and for the campaigns of its advertisers.

The surprise miss overshadowed what was otherwise a pretty decent quarter for Google, but seems right at home amid the disastrous few weeks the company has had to kick off 2012. Google+ now has 90 million users, Google said (without defining what a “user” is in this context) and advertising revenue on the core search site was up 29 percent compared to last year at this time.

Page and Wojcicki defended the decision to integrate Google+ into the company’s core search project, which Page said allows Google to provide a better product because it helps the search engine understand the differences between how two different individuals with identical search queries perceive the world. If Google had as much social data as Facebook or Twitter, that might be true, but it does not, and Page admitted that those companies don’t seem very interested in sharing that data with Google.

Page also said 250 million Android devices are in use, and the company also said that its display-advertising business is on pace to do $5 billion a year in revenue.