Google stock has slipped as much as 8 percent in after-hours trading on Thursday after the company has reported lower fourth quarter earnings than were expected by most analysts. However, Google's results are still better than the previous year.

"We're very, very pleased with our year and also the quarter that's just ended," Google Chief Executive Eric Schmidt said during a conference call with analysts.

Over the last year, the Internet company has seen net income rise to $1.21 billion, or $3.79 a share, compared with $1.03 billion, or $3.29 a share, in the same period a year earlier. However, the company's earnings were brought down by sluggish performance of its AdSense network.

"We have had a challenge in the fourth quarter with social networking [advertising] inventory as a whole," said Google co-founder Sergey Brin. "Some of the monetization work we were doing there did not pan out as we'd hoped."

In fact, it may well be that Google is losing money on MySpace, because it is constrained by a contract to pay up its owner, News Corp., around $900 million during a three-year period which ends in 2010.

As many analysts have pointed out, Google failed to cash in on its deal with MySpace and, also, failed yet to implement a strong money-making scheme in YouTube, its precious acquisition. Google stock already declined more than 20 percent this year on the overall drop in stocks across the economy.

Google benefited from a low tax rate of 25 percent instead of the usual 27 percent, which pushed earnings around 11 cents per share. The company was left with a strong $3.39 billion in revenue after paying fees to the thousands of Web sites in the AdSense online advertising network. Analysts were expecting a little more by a few tens of millions.

"We have not yet seen any negative impact from the rumors of future recessions," Schmidt said, rejecting rumors of a severe economic slowdown of the U.S. economy.

Just a few days ago, the biggest Japanese mobile operator, NTT DoCoMo, and Google have formed a partnership that includes providing search services, search-related advertisement and potential applications to i-mode users. With 53 million subscribers at the end of September 2007, NTT DoCoMo is the largest mobile operator in Japan, controlling half of the market. According to NTT DoCoMo, i-mode, the mobile Internet service promoted by the company, has already 48 million users.