Internet giant Google bucked the economic downturn to outperform Wall Street's expectations, according to its latest financial results.

The company reported revenues of $5.7bn for the three months ending in December, up 18% year-on-year, but an increase of just 3% on the previous quarter's figures.

Profit was down significantly to $382m, compared with $1.2bn a year ago – however, this was largely the result of investments in internet rival AOL and wireless broadband provider Clearwire.

Google chief executive Eric Schmidt said the company had performed well given the grim circumstances in the advertising industry. But he said he could not predict whether things would get easier in the future.

"Google performed well in the fourth quarter, despite an increasingly difficult economic environment," he said. "It's unclear how long the global downturn will last, but our focus remains on the long term."

In recent years Google has become more reliant on money generated by advertising on its own websites, rather than through its advertising networks – and that pattern continues to be the case.

Google's own sites generated $3.8bn of the quarter's overall revenues, making up 67% of its income, compared to a far smaller proportion of 45% just a year ago.

Although this means the company's famously efficient advertising network is now less powerful, it may have helped insulate the company from some aspects of the financial crisis.

Google has also become more reliant on its international business, with the rest of the world now responsible for 50% of income. It said revenue would have been $334 million higher had it not been for currency slides – particularly in Britain.

The figures were welcomed by Wall St analysts , who had expected tougher results, and by investors,who pushed Google shares up by as much as 2%.

"The quarter was pretty solid in light of the broader economic perspective – earnings were fine, revenues were fine," said Jason Avilio, an analyst with Kaufman Bros. "People didn't have high expectations."

Over the past week Google has made a series of moves to demonstrate that it is focused on its central products. Several services have been shut and a number of engineering offices are being closed down. But despite making 100 recruiters redundant as a result of slowing growth, the company said it would continue hiring new staff through the downturn.

Avilio said that although Wall Street believed Google had too many employees, it would not benefit shareholders to cut jobs like Yahoo, which has shed 2,500 in the past year, or Microsoft, which had earlier announced it was shedding 5,000 positions.

"There is a lot of fat to trim operationally, but nothing like the thousands of layoffs at other tech companies," he said.