Google said fourth-quarter profit rose 17% to $1.21 billion, but net revenue fell short of Wall Street's expectations. Net revenue was $3.39 billion, about $60 million below estimates. Google co-founder Sergey Brin said the company hasn't figured out the best way to make money from advertisements on millions of social networking sites. Google also reported that research and development costs rose 63% from the prior quarter, while sales and marketing costs climbed 65%. Spending on general administration increased 72%. Google executives said heavy research spending was needed to generate the innovations that keep Google a leader.
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