Average ad prices dipped by 2% during the quarter.
Google has reported 5% drop in profit during the third quarter of 2014 to $2.8bn, as its average cost-per-click decreased while its cost increased.
However, the search major’s revenue grew by 20% to $16.52bn for the period, though its average ad prices dipped by 2%, making it the smallest drop during what is currently a three-year plunge in the prices paid for ads appearing with search results and other Web content.
Google CFO Patrick Pichette said: "Google had another strong performance this quarter, with revenue up 20% year on year, at $16.5 billion.
"We continue to be excited about the growth in our advertising and emerging businesses."
In addition, Google’s profits were also affected by rising real estate costs, including data centres, and hardware inventory costs, which rose by 37% to $3.35bn.
Revenues and other information – Google Inc. revenues for the quarter ended September 30, 2014 were $16.52 billion, representing a 20% increase over third quarter of 2013 revenues of $13.75 billion.
During Q3, Google’s sites generated $11.25bn or 68% of overall revenues, while revenue generated by partner sites rose by 21% to $3.43bn and other revenues reached $1.84bn, contributing to 11% of total revenues.
Recently, Google rolled out its next generation Nexus devices, including Nexus 6 ibig screen smartphone; Nexus 9 tablet and a Nexus Player set top box, all powered by latest Android Lollipop.