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Google misses earnings expectations, but sales solid

The company's first-quarter revenues were slightly better than what Wall Street was expecting, but earnings per share were lower than anticipated.

Google CEO Larry Page, who was on the company's first-quarter conference call, poses with pop star Lady Gaga, who was not. TwitPic

Google's first-quarter revenues announced this afternoon were slightly better than what Wall Street was expecting, but earnings per share were lower than anticipated.

Analysts were expecting about 25 percent year-over-year revenue growth--about $6.32 billion. Google ultimately reported revenues of $6.54 billion once traffic acquisition costs were removed.

"We had a great quarter with 27 percent year-over-year revenue growth," Chief Financial Officer Patrick Pichette said in an investor release. "These results demonstrate the value of search and search ads to our users and customers, as well as the extraordinary potential of areas like display and mobile. It's clear that our past investments have been crucial to our success today--which is why we continue to invest for the long term."

That figure that Pichette cited includes the money that Google splits with partner companies, though. When you take that out, Google slightly missed Wall Street's understandably high expectations--earnings of $8.08 per share instead of the anticipated $8.10.

The real intrigue with Google's earnings report, though, is that it marks the first release of financial information since co-founder Larry Page returned to the CEO post at the company, replacing Eric Schmidt. On an investor call Thursday, Page made a brief appearance at the beginning to address.

"We're really still at the beginning from a user perspective. There's tremendous improvements we have in our core product and our core business, and we're really excited about that," Page said. He thanked outgoing executive Jonathan Rosenberg, whose departure was announced earlier this month, and said that Schmidt, who remains chairman, has been "doing tremendous, tremendous things for the company" and that his fellow co-founder Sergey Brin is "working very intensely on a few emerging products."

The last time Page was CEO, Google had not yet gone public.

Pichette led the conference call, saying that "our product innovation over the past 18 months has been nothing short of extraordinary," citing the success of the Chrome browser, Android mobile operating system, and new display advertising products. "We are building multimillion-dollar businesses and we are confident that now is the time to invest."

Executives on the call reiterated that 2011 will be the biggest hiring year in the company's history, and that full-time employees went from 24,400 full-time employees as of December 31, 2010 to 26,316 at the end of March.

Google has $36.7 billion in cash and cash equivalents.

This post was last updated at 1:52 p.m. PT.