One-time investment write-downs were the primary cause of the earnings drop. CEO Eric Schmidt and other executives said during a conference call to discuss the results that the company's performance during the quarter had been strong and that they were satisfied, considering the current global economic problems.

"We had strong search query growth year-on-year, revenues were up in most verticals, and we had tight control of our costs, something which eluded us perhaps in the past, but we got the formula down now," Schmidt said.

Google reported revenue of US$5.70 billion, up 18 percent compared with the $4.83 billion in 2007's fourth quarter. Subtracting the commissions Google pays to its ad network partners, revenue came in at $4.22 billion.

Net income was $382 million, or $1.21 per share, down from the $1.2 billion, or $3.79 per share, recorded in 2007's fourth quarter.

On a pro forma basis, which excludes one-time items, net income was $1.62 billion, or $5.10 per share. This excludes expenses such as stock-based compensation and costs related to the settlement of the copyright infringement lawsuits brought by the Authors Guild and the Association of American Publishers (AAP) over Google's Book Search service. It also excludes charges such as write-offs of $1.09 billion of Google investments primarily in AOL and Clearwire.