google drops

Google's search advertising rates declined more sharply than expected during the first quarter and the company increased payouts to partners.

Google's plans to split its stock and to create a special class of non-voting shares drew some criticism from corporate governance advocates. But given that the move merely perpetuated a two-tier system that has long given Google's founders majority control of the company, investors seemed to shrug off the news.

Google's explanation for the declining CPC on a conference call with analysts offered clarity, but may not convince bearish investors, BMO Capital Market analyst Daniel Salmon wrote in a research note. "Mobile is increasingly an area of concern. Google has roughly 90 percent share of mobile search, but this revenue must be shared with OEM handset manufacturers and carriers," said Benchmark analyst Clayton Moran.