Image copyright Reuters Image caption Investors are focusing on Google chief executive Eric Schmidt and his leadership of the tech giant

Google has reported third-quarter profits of $2.8bn (£1.7bn), down 5% from the same period a year earlier.

That sent shares in the internet giant down over 3% in after-hours trading.

A closely-watched figure - the average cost-per-click that Google - decreased by 2%.

The company also missed analyst expectations for revenue, which increased by 20% to $16.52bn for the period, which was for the three months ending on 30 September 2014.

"We continue to be excited about the growth in our advertising and emerging businesses," said Google chief financial officer Patrick Pichette in a statement accompanying the earnings statement.

Google's profits were also hit by increasing costs of real estate, such as data centres, and hardware inventory costs, which increased by 37% to $3.35bn from the same period a year earlier.

Although Google makes the majority of its revenue from the advertising it places on its search site and others, the technology giant has been looking to expand its offerings.

On Wednesday, it unveiled new models of its Nexus phone and tablet devices, as well as a new version of its Android operating system.