SAN FRANCISCO—Google may be facing growing challenges from European regulators, encroaching competitors, slowing growth and the rapidly changing habits of smartphone-toting consumers, but it still wields more power than any other company on the Internet. And that isn’t going to change anytime soon.

That much was clear on Thursday when the Internet giant reported first-quarter results after the market closed.

For the sixth straight quarter, Google’s (GOOG) earnings fell below analyst estimates. But investors were pleased with a healthy bump in the number of paid clicks on Google ads and comments from executives about the growing popularity of ads on the Google-owned video service YouTube, sending shares up 4% to $567.45 in after-hours trading.

BGC Partners analyst Colin Gillis says investors had braced for worse. And, he said, it helped that the Nasdaq Composite Index closed at a record high that topped its dot-com era peak.

“This shows that downside concerns and fears were much worse than estimates and those concerns and fears are not materializing to the degree expected,” Gillis said.

Google, which gets more than half of its revenue from overseas, got walloped by the stronger U.S. dollar. Google said first-quarter revenues would have been $795 million higher if it were not for the currency headwinds.

Spending — a perennial source of concern for investors — continued to spike as the Internet giant poured money into speculative projects such as driverless cars and balloons that beam the Internet to the developing world.

In a conference call with analysts, outgoing chief financial officer Patrick Pichette reassured analysts that Google is taking a “disciplined” approach to spending.

SHIFT TO YOUTUBE

He also sought to boost investor confidence by dispelling the perception that the consumer shift to mobile devices has driven down advertising prices. He told analysts that the falling prices are the result of people watching ads on Google’s YouTube service, which cost less than search ads.

Google’s growth has slowed as its main search advertising business has matured. With the shift of consumers and advertising dollars to mobile, Facebook has emerged as an increasingly powerful rival quickly gaining market share in digital advertising, especially on smartphones and tablets. And both companies are competing for video advertising as marketers shift some of their television budgets to online spending.

Last week the European Union filed a complaint against Google, alleging it abused its search dominance to promote its own shopping service. Google denies the allegations, but could face fines up to $6 billion and fundamental changes to how it conducts business.

Google posted earnings per share excluding certain expenses such as stock compensation of $6.57, up from $6.27 a share in the year-ago period. Analysts expected Google to earn $6.61 a share.

Revenue for the quarter was $17.26 billion, up 12% from $15.42 billion. Minus traffic acquisition costs, it was about $13.91 billion, short of the $14.08 billion analysts expected.

Google earned $6.27 a share on revenue of $12.2 billion in the year-ago quarter.

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