Google's fourth-quarter profit failed to meet analyst expectations, which reflected the recessing U.S. economy's dent on the online search leader's business.

Google announced Thursday that it earned US$1.21 billion, or $3.79 per share, during the last quarter of 2007.

Compared to the same period the previous year, net income was up 17 percent from $1.03 billion, or $3.29 per share.

Without the stock awards to its employees, Google said it would have $4.43 per share, a penny below the estimate by Thomson Financial's analysts.

Its total revenue accounted for $4.83 billion in 2007, a 51 percent improvement over $3.21 billion in the previous year.

More importantly, Google retained $3.39 billion in revenue after paying commissions to its thousands of advertising partners across the Web, which missed analyst estimates by about $60 million, or under two percent, according to Media InfoCenter.

The disappointment has aroused concerns whether Google is able to sell as much online advertising as consumers have a tighter budget during the U.S. economic recession.

Those worries were already reflected in its stock price – a nearly 20 percent decline has been reported in January.

Google shares rose $16.03 and closed at $564.30 in Thursday's regular session then plunged $41.60, or 7.4 percent, in extended trading after the 4Q results were released.