Shares of Google Inc fell 8 percent after the Internet giant's quarterly earnings missed estimates as money paid by marketers for its search ads fell for the first time in two years.

Google shares were at $586.09 on Friday morning on the Nasdaq in heavy trade, making the stock one of the top losers on the Nasdaq.

The search giant underperformed on both revenue and earnings, disappointing investors who had counted on record U.S. online-commerce to prop up results, prompting several brokerages to cut their price targets on the stock.

The market needs to raise expectations on paid click growth, going forward, and lower its estimates for cost per click (CPC) as changes continue in ad format and mix, Goldman Sachs analysts said in a note.

The fall in CPC led to nearly a half-dozen questions from analysts during the post-earnings conference call, prompting a terse one-liner from Chief Executive Larry Page, who at one point requested that maybe we can get our next question not about CPCs.

Barclays Capital raised concerns about investment spending at Google -- which is increasingly investing in mobile and social networking initiatives to stave off competition from rivals Apple Inc and Facebook.

Wall Street is also uneasy about one of Google's biggest bets: its planned $12.5 billion acquisition of smartphone maker Motorola Mobility Holdings.

Most analysts, however, said Google's core results were solid as paid click growth accelerated by more than a third, margins improved, and display and mobile businesses performed well.

Jefferies analyst Youssef Squali called the decline in Google shares an over-reaction to an otherwise decent quarter.

We estimate mobile, including tablets, is having the biggest impact on paid click growth ... we expect the growth in mobile to be 146 percent in 2012 and represent 15 percent of gross sales as we exit fourth-quarter of 2012, Goldman Sachs analysts said.

The acceleration in paid clicks suggests that underlying demand for Google ads is quite healthy across devices, JP Morgan analysts said, adding Google is best-positioned for the shift to new media.

Barclays, Baird, Jefferies and JP Morgan maintained their top ratings on the stock.

(Reporting by Aditi Sharma and Soham Chatterjee in Bangalore; Editing by Tenzin Pema, Don Sebastian, Unnikrishnan Nair)

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