Google Trading Lower Despite Better Than Expected Earnings

Revenues were also better than expected at $5.09 billion, higher than the $4.95 billion that analysts had forecast.

Despite the better than expected earnings and revenue figures, GOOG stock is trading lower, and a major reason for the sell off is its sizable increase in costs during the quarter. Total costs and expenses came in at $4.3 billion verse $3.6 billion during the same period last year.

The increased costs come from a massive hiring spree during which the company hired nearly 800 new employees during the quarter. This takes the total number of people employed by Google to 20,621. Google was able to weather the recession better than most companies, and one way it did so was by reducing its workforce, so it is good to see the company hiring once again.

Another piece of good news for the company is that people are clicking on more of the company's ads. The company's rate of paid clicks rose 15% verse the first quarter of last year, and comes on the heels of a 13% jump in during the fourth quarter. The price paid for the clicks was 7% higher than the same period last year.

Google stock is trading down 4.6% in after hours trading to $567.99, down $27.50 a share.