Google has disclosed its financial results for Q3 2014, showing a 20 per cent increase in revenues year-on-year, falling short of Wall Streets expectations.

Revenue, which totaled $16.52bn (£10.26bn), was mostly made up of site revenues, which provided 68 per cent of the total figure. Network revenues brought in $3.43bn, or 21 per cent of total revenues, but showed the weakest growth, with only a nine per cent increase year-on-year. Other revenues made just 11 per cent, but demonstrated 50 per cent growth compared to Q3 2013.

Growth in the number of paid clicks for ads, Googles main source of revenue, grew by 17 per cent for the quarter, a drop from the 25 per cent growth it was able to deliver in Q2. However, cost-per-click rates, which have been declining for several years, managed to slow their descent a little, dropping only 2 per cent year-on-year.

Costs also grew ahead of revenue increases, climbing 28 per cent year-on-year, with research and development costs jumping by 46 per cent and capital expenditures up 45 per cent as Google builds additional data centres. The disappointing results led to a 2 per cent drop in Google shares in after-hours trading.

“As predicted, Googles earning show positive growth over the last quarter,” said Jon Myers, vice president and managing director for EMEA at Marin Software. “Based on our own Q3 data its likely a significant chunk of this growth is coming from searches on mobile. Weve seen search ads on mobile perform significantly better than mobile ads on social media platforms like Facebook.

“Advertisers need to ensure theyre covering top of funnel mobile activity with social ads but also driving conversions at the bottom of the funnel through search; the key is balancing mobile budgets across the two channels.”