Google's stock fell 15 per cent in after-hours trading after it posted earnings that slumped below analyst expectations.

At least it's in good company - Yahoo! and eBay have also been punished recently for posting what by any standards are healthy results. But Google's profits declined from the previous quarter, and that was enough to send its shares into a nose dive.

By some estimates Google could see $18bn wiped off the value of the stock tomorrow morning.

Sales at the advertising giant in Q4 rose 86 per cent year-on-year, with Google grossing $1.92bn. Net income was $372m, down from $381m in Q3. "Traffic acquisition costs" (TAC), which Google defines as money it shares with its Adsense partners, cost the company $629m, or exactly one third of its advertising revenues, leaving usable revenue at $1.29bn. Google blamed a higher tax rate, and higher than expected operating costs for the reduced profit. However, unlike most companies, Google fails to provide earnings guidance, which can help smooth out the bumps.

Revenue from Google's own properties generated just over a billion, or 57 per cent of all gross income, with its Adsense program snaring 42 per cent.

The former, which provides Google with much higher margins than the latter, rose 112.5 per cent year-on-year, compared to a 72.9 per cent increase in AdSense.

For FY 2005, Google grossed $6.14bn and reported a net income of $1.47bn.

"We invest with a long-term view of the business. We are going to make some really big bets," Google CEO Eric Schmidt said. And the company can afford to: Google finished the fiscal year with $8bn in the bank. Google has become the internet company onto which the popular media's futurist fantasies are projected, a service performed by Microsoft a decade ago. But even we were perplexed by this one. ®