Google profits reach an unprecedented high

Google reported on Tuesday that its profit climbed and its annual revenue hit an unprecedented high last year as it evolved to stay in tune with people using smartphones and tablets by ploughing more money into advertising and research and development.

Google earned nearly $2.9 billion or $8.62 cents per share during the final three months of last year. That compared to net income of $2.7 billion, or $8.22 per share, at the same time last year.

Revenue surged 36% from the previous year to $14.4 billion. In after hours trading Wednesday, Google shares surged nearly 5% to $736.10.

"We ended 2012 with a strong quarter," said Larry Page, CEO of Google, in a statement. "Revenues were up 36% year-on-year, and 8% quarter-on-quarter. And we hit $50 billion in revenues for the first time last year -- not a bad achievement in just a decade and a half."

Google dominates the US digital advertising market, which grew 14.9% to $10.58billion in the final three months of last year.

Google takes in more than 41% of digital ad revenue in the United States and "holds more share than any other company" when it comes to online, display and mobile advertising.

Google's strong performance came as another technology giant, IBM, revealed its earnings grew 6% in the fourth quarter, as it benefited from lucrative software businesses, such as internet-based computing.

IBM earned $5.8 billion between October and December, compared to $5.5 billion over the same period a year earlier.

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