Google Misses Estimates - GOOG Shares Crash

Google's fourth quarter earnings missed Wall Street estimates, sending the stock crashing after hours.

According to Thomson Financial, Google's fourth quarter revenue came in at $4.83 billion, which was up 51% from a year ago. After advertising sales costs revenue came in at $3.39 billion, below the $3.45 billion analysts had expected.

"We're very pleased with our performance this quarter," said Eric Schmidt, CEO of Google. "It reflects strong momentum in our core business, growing receptivity to our new business initiatives, and improved discipline in managing our operating expenses."

Google's closest rival Yahoo! also disappointed Wall Street when fourth quarter net income fell 23% from a year ago. Microsoft a laggard in the space is gaining some traction with users and this might give a lift to their search advertising unit adCenter. Which in turn would increase the pressure on keyword pricing which will ultimately affect the earnings outlook for Google and Yahoo!