Google's Gap, IBM's Trap: Tech Winners & Losers

(Updates from 12:00 p.m. ET with closing information.)

NEW YORK ( TheStreet) -- Google ( GOOG) shares extended gains on Friday after the Internet search giant beat Wall Street earnings expectations for the first quarter.

The Mountain View, Calif.-based company reported earnings of $11.58 per share on $13.97 billion in revenue after the closing bell. Analysts polled by Thomson Reuters were expecting $10.66 per share on $14.09 billion in revenue.

Shares were adding 3% to $788.35.

Earnings were aided by an 8% tax rate during the quarter. On the conference call, CFO Patrick Pichette noted this was helped by an R&D tax credit from 2012 that was only retroactively applied in 2013, as well as a mix in earnings.

Wall Street was largely positive on the results, with analysts telling investors the long-term trend is intact. ""The company's core growth remains above industry levels for both online advertising and ecommerce, and with the rollout of Enhanced Campaigns and PLA overseas, and Display continuing to show material traction, we expect to see further improvement to monetization in 2H:13 and 2014," wrote Cantor Fitzgerald analyst Youssef Squali.

IBM ( IBM) shares were plunging 7.1% to $192.46 after the software and services giant missed earnings expectations for the first time in a while.

IBM reported $23.4 billion in revenue, down from $24.7 billion year-over-year, and missing Wall Street's forecast of $24.6 billion. On a non-GAAP basis, IBM earned $3 a share, up from $2.78 a share in the prior year's quarter. Analysts surveyed by Thomson Reuters were looking for earnings of $3.05 a share. IBM said earnings were affected by a weaker Japanese yen, which shaved 7 cents per share from earnings.

Concerns about a slowing global economy were brought to light in CEO Ginni Rometty's prepared remarks. "Despite a solid start and good client demand we did not close a number of software and mainframe transactions that have moved into the second quarter," Rometty said in the press release.

IBM reiterated its fiscal 2013 earnings forecast of at least $16.70, excluding items. Analysts surveyed by Thomson Reuters are looking for earnings of $16.77.

Microsoft ( MSFT) shares were rising 3.5% to $29.81 after the company beat estimates, and announced CFO Peter Klein was stepping down from the company.

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