Google shares jumped about $35, or 5 percent, after the markets closed Tuesday as the search engine giant beat estimates in its fourth quarter earnings report.
Google reported earnings of $3.57 billion in net income, or $10.65 per share, on $14.42 billion of revenue, which beat analysts' estimates. The company's stock jumped to about $738 on the news.
Investors had been bracing for a disappointing earnings report. The stock ended Tuesday down at $702.87, having fallen from $733.35 a week ago and $741.48 two weeks ago, before spiking in after-hours trading once the earnings results came out.
Revenue was up 36 percent from the previous year to $14.4 billion.
Google CEO Larry Page seemed pleased.
"Many claim it's my nature never to be satisfied, we've made real progress," he said during Tuesday's earnings call. "2012 was an amazing year for Google, and we are all set for 2013."
"We ended 2012 with a strong quarter," Mr. Page said. "Revenues were up 36 percent year-on-year, and 8 percent 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. In today's multi-screen world, we face tremendous opportunities as a technology company focused on user benefit. It's an incredibly exciting time to be at Google."
Advertising-related revenue brought in $12.9 billion, an important benchmark for investors as the industry shifts more toward mobile.
"Companies of all sizes continue to embrace online advertising," Google's Chief Business Officer Nikesh Arora said. "On the mobile front, it's important to understand that the vast majority of our advertisers have opted into mobile. I think things are going in the right directions."
A big chunk of that ad revenue came from the hit song "Gangnam Style." Google said the song has generated $8 million in advertising revenue.
The international hit from South Korean rapper Psy, first uploaded to YouTube in July 2012, is the first song in the website's history to reach 1 billion views and is the most popular song in YouTube history.
YouTube is a subsidiary of Google.
Mr. Page said the company recognizes the importance of mobile. "We now live in a multiscreen world," he said. "We feel naked without smartphones, and many users have more than one device. They have a laptop, a smartphone and a tablet."
Distributed by MCT Information Services
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