MOUNTAIN VIEW, California: Google posted revenues of $5.7 billion (€4.4bn; £4.2bn) in the final quarter of 2008, up 18% year-on-year, but profits fell by 68% to $382.4 million following a write-down on the value of some of its investments.

According to Google, the revenue increase was driven by online retailers spending more in an effort to achieve greater hit rates, and high-street retailers aiming to bolster their internet operations.

However, profits fell from the $1.2bn recorded the same period a year ago after write-downs worth a combined total of $1.09 billion in Google's stakes in AOL and Clearwise.

Despite that, observers suggest that the search giant's strong performance in the face of the economic downturn shows it has room for growth.

Says Derek Brown, an analyst at Cantor Fitzgerald: "It's clear that macro-economic challenges continue to rob Google of growth, but it seems equally clear that the company continues to make headway and take share in this market."

Data sourced from; additional content by WARC staff