updated 4/14/2011 5:23:29 PM ET 2011-04-14T21:23:29

Google's first-quarter earnings came in below analyst projections as the Internet search leader sped up hiring and increased spending other areas to drive up its expenses.

The results released Thursday may heighten investor fears that Google's earnings might suffer because of the company's commitment to hire at least 6,200 workers this year. That would be the most in Google's 13-year history.

Google co-founder Larry Page, who replaced Eric Schmidt as CEO after the quarter ended, has indicated he plans to keep investing in long-term opportunities that may take years to pay off, even if that crimps the company's short-term results.

Page, known for his aloofness, made a few tame remarks on Google's earnings conference call Thursday before turning the presentation over to the company's chief financial officer, Patrick Pichette, who has been steering the presentations for the past year.

"I'm very excited about Google and our momentum, and I'm very, very optimistic about our future," Page said. He also assured that the management transition that Google announced three month ago is unfolding as the company envisioned, with Page overseeing day-to-day operations while Schmidt handles government relations and stalks possible acquisition targets in his new role as executive chairman.

Google shares shed $27.74, or nearly 5 percent, to $550.77 in extended trading. The stock closed the regular session at $578.51, up $2.23.

The company earned $2.3 billion, or $7.04 per share, in the period ending in March. That was an 18 percent increase from nearly $2 billion, or $6.06 per share, last year.

If not for the cost of employee stock rewards, Google said it would have earned $8.08 per share. That was below the average estimate of $8.11 per share among analysts surveyed by FactSet.

Revenue was nearly $8.6 billion, a 27 percent increase from last year.

After subtracting the commissions paid to ad partners, Google's revenue stood at $6.54 billion. That figure topped the average analyst estimate of $6.33 billion, according to FactSet.

Expenses grew faster than revenue. The company added 1,916 employees to end March with more than 26,300 workers. More than half of the new staff is working on products and services to supplement the search advertising network that makes most of Google's money. The new growth opportunities include video ads on Google's YouTube site, ads on smartphones, and more banner advertising.

A 10 percent raise that Google gave all its employees at the beginning of the year contributed to rising costs.

Google also spent $890 million on data centers and other capital projects in the quarter, more than triple the $239 million it spent in the same period last year.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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