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Google's quarter results pleased Wall Street analysts and eased concerns over the company's spending on non-core acquisitions and projects, including its mobile business.
Google's stock has underperformed the broader market in 2010, partly because the company's growth prospects appeared to be slowing amid increasing competition from social networking powerhouse Facebook, which counts more than 500 million users.
On Wednesday, Facebook and Microsoft unveiled improvements to Microsoft's Bing search engine that incorporate personalized Facebook data, such as restaurant recommendations from a person's friends, into search results.
The company added more than 1,500 employees to its payroll in the third quarter -- which some analysts said was a record pace for the company -- and its operating expenses totaled $2.19 billion, up from $1.64 billion in the year-ago quarter.
CFO Pichette said the Internet industry was waging a "war for talent." He added that its YouTube online video site was now "monetizing" over 2 billion views a week, a rise of 50 percent from a year earlier
The world's largest Internet search engine posted a third-quarter net income of $2.17 billion or $7.64 a share, excluding items, surpassing Wall Street's average estimate of $6.69 a share, according to Thomson Reuters I/B/E/S.
Net revenue, which excludes fees that Google pays to partner websites, came to $5.48 billion, versus expectations for $5.27 billion. Net revenue in the 2009 third quarter was $4.38 billion.
Google's 9-percent rise in extended trading, to $590, would be the biggest single-day gain since November 2008. The stock had closed 0.44 percent lower at $540.93 on Nasdaq before the earnings announcement.
"Looks like business is solid across the board. The biggest concern for investors was expenses. Given the EPS number, it looks like margins have to be better than what the Street was expecting," said UBS analyst Brian Pitz. (Additional reporting by Alex Dobuzinskis and Liana Baker, writing by Edwin Chan; Editing by Richard Chang)