Google lost $41 to $391.23 in opening deals. The shares had dropped as much as 19 per cent in after-hours trades.

Google missed its Wall Street profits forecast for the fourth quarter of the year by a mile, while sales at its British division missed their target in the last three months of the year, with the Christmas period particularly bad in the UK.

Britain is Google’s biggest advertising market outside the United States and its decline is a blow for the Silicon Valley-based company. British operations contributed 14 per cent of revenue in the fourth quarter, down from 15 per cent during the three months to September.

Google suggested the fall came partly because British internet users had cut the amount of time they spent online over the Christmas holidays.

Analysts, however, queried that explanation. Theresa Wise, a media partner at Accenture, the management consultants, told Times Online that while Google’s argument was "not totally implausible," it "failed to stack up" and did not explain convincingly Google’s slowing growth rates.

"It’s not a good enough reason to explain the figures," she said. "It seems likely that Google is actually seeking to avoid people reaching the conclusion that its mature markets are toping out."

Google Shares plunged erratically in volatile trading after the market closed in New York last night, even though profits across the group for the fourth quarter rose 82 per cent to $372.2 million, or $1.22 per diluted share, from the same period a year before on sales up 86 per cent to $1.92 billion. Wall Street analysts had expected the company to make profits of as much as $1.77 a share.

George Reyes, the chief financial officer, told analysts that the company had been hit with a much higher tax bill than it had forecast in the fourth quarter.

However, a clutch of Wall Street analysts were keen to look ahead to Google making more money from newly introduced services such as online video.

Anthony Noto, Goldman Sachs analyst, told clients to buy the stock at $380 to ride the run-up to $500, his 12-month price target. He is still predicting a 20 per cent to 25 per cent earnings growth from 2007 to 2010.