Google Inc. on Tuesday reported record revenue of $1.03 billion for the quarter ended Dec. 31, up 101% year over year, and 28% over its previous quarter.

Earnings on a diluted per-share basis were 71 cents for the quarter. The company attributed its impressive results to strong traffic and monetization growth, as well as advertisers' increasing acceptance of the Internet as a viable advertising channel.

"Google had an exceptional quarter. Revenues and profits increased significantly, our execution was solid across the company, and, most importantly, our relationship with our users, partners, and advertisers became even stronger," Google CEO Eric Schmidt said in a statement. "All of this happened while we continued to innovate, expand around the world, and make strategic, long-term investments."

Google-owned sites generated $530 million, or 51% of total revenue, an increase of 118% over the fourth quarter of 2003. Revenue generated on Google's partner sites, through AdSense programs, contributed $490 million, or 48% of total revenue, a 92% increase over the comparable revenue generated in the same quarter last year.

"They were very, very strong on both the top and bottom lines," says Marianne Wolk, senior Internet analyst at Susquehanna Financial Group, which had predicted earnings of 70 cents per share last week. "Twenty-eight percent sequential growth was well above what anyone expected. It certainly shows that Google led the market this quarter."