Google has announced a surge in profits during the last quarter of 2006.

In the three-month period ending December 31st, the search engine giant reported revenue of $3.21 billion (£1.63 billion), an increase of 67 per cent compared to the same period in 2005.

The rise in profits was largely attributed to an increase in the number of paid searches.

President of technology Sergey Brin said: "We paid over $3 billion in 2006 to our partners and this is a figure that we expect is going to increase as we ramp up our video, radio and print programmes."

Mr Brin added that as the number of adverts on "less commercial searches" was reduced, Google was allowing companies to increasingly target the audiences they are looking for, reports the BBC.

Revenue from pay-per-click, which includes clicks related to advertisements on Google websites and AdSense partners, was reported to have increased by 61 per cent.

Earlier this week, Google announced YouTube users may be able to get a slice of the advertising revenue generated from the videos they upload to the website.