Google Inc's net revenue in its core Internet business increased more than 20 percent in the fourth quarter, after the world's No. 1 search engine introduced new product ads during the holiday shopping season.

Shares of Google were up roughly 4.5 percent at $734.46 in after-hours trading on Tuesday.

The company posted consolidated revenue, which includes its Motorola Mobility mobile phone business but not the television set-top box business it recently agreed to sell, of $14.42 billion on Tuesday.

Consolidated net income in the fourth quarter was $2.89 billion or $8.62 per share, compared to $2.71 billion, or $8.22 per share, in the year-ago period when Google had not yet acquired Motorola.

Excluding certain items, Google said it earned $10.65 per share in the fourth quarter.

Average cost-per-click, a critical metric that denotes the price advertisers pay Google, declined 6 percent from a year ago, the fifth consecutive quarter of decline.

Excluding traffic acquisition costs, Google's core Internet business generated net revenue of $9.83 billion in the fourth quarter, compared to $8.13 billion in the fourth quarter of 2011.

(Reporting By Alexei Oreskovic; Editing by Bernard Orr)