For the full year 2008, Google had revenue of $21.8 billion, up from $16.6 billion in 2007. Net income rose to $4.23 billion, or $13.31 earnings per share, from $4.20 billion, or $13.29 earnings per share, in 2007.

"We had a strong quarter and what turned out to be a strong year, and business is quite healthy, especially given the tough economic climate," Schmidt said.

Google-owned sites generated 67 percent of the fourth-quarter revenue, while 30 percent came from ad network partners. Although Google didn't say, the remaining 3 percent probably came from smaller sources, such as the Enterprise business. By geography, half of the quarter's revenue came from the U.S. and half from abroad.

Google also announced Thursday it plans to offer employees a voluntary, one-for-one stock option exchange intended to create more incentives for employees to remain at Google.

Employees will get the chance to exchange all or part of their stock options for the same number of new options between Jan. 29 and March 3.