Larry Page, co-founder and president of Google, conceded last night that the search engine had not been an "immediate success" in China as he announced lower-than-expected second-quarter profits.

But Mr Page predicted that the world's most successful internet search engine would reap victories in China and that it was already accelerating market share.

The company just missed Wall Street forecasts because of paying for its stock option scheme for employees.

Google, which started business in the late 1990s, said that the cost of servicing its stock-based compenstaion scheme for employees was $242 million (£118 million), compared with $184 million in the first quarter of the year.

In the second quarter of the year to June 30, the California-based company made $925 million in net income, representing a 28 per cent increase on the same period the year before.

Wall Street was hoping for earnings per share of $3.57; instead, Google made $2.93 over the period.

Scott Kessler, an analyst at Standard & Poor's in New York said: "If there's a single number people are interested in, that's it. Growth has consistently been decelerating."

The figures mark only the second time that Google has missed analysts' earnings forecasts.

However, Google's performance still marks a stark contrast to its smaller rival Yahoo!, which this week reported a 2 per sent fall in profit during the second half of the year.

Revenue for the period rose 58 per cent to $3.87 billion, compared with the same period the year before.

The group, which is seeking to boost the proportion of business that it derives from outside the US, said last night that 48 per cent of sales over the period were non-US, with 15 per cent of total revenue earned in the UK, a 1 per cent fall on the first quarter of the year.

The group released its figures after the New York markets had closed.

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