Friday newspaper round-up: Google, Vodafone, HSBC

Shares in Google dropped more than 10% in after-hours trading on Thursday, after the web search giant reported record sales but fell short of analysts' expectations. The company grew its full year revenues by 29% and saw quarterly revenues climb 27% year-on-year to $10.58bn (£6.83bn), including $1.06bn from the UK. However, its operating profits grew much more slowly by comparison, climbing to $2.71bn, up just 6% from $2.54bn in the same period last year. Earnings per share were $9.50, below Wall Street's consensus predictions of $10.49. Chief executive Larry Page hailed 2011 as "a great year" for the company, as quarterly revenue "blew past the $10bn mark for the first time," according to The Telegraph. Vodafone will on Friday hear the outcome of a long-running battle with the Indian tax office over a $2.5bn (£1.3bn) bill which the mobile phone giant argues that it did not run up. The Indian Supreme Court will hand down its ruling in Delhi, deciding once and for all whether Vodafone should pay tax on its $11bn acquisition of a 67% stake in Hutchison Whampoa's Indian mobile unit, which later became Vodafone Essar. Vodafone has consistently protested against the tax bill on the grounds that the 2007 deal was between two overseas companies, that the tax was applied retrospectively and capital gains tax is usually applied to the acquired company, not the buyer. However, if Chief Justice Kapardia, the judge overseeing the case, comes down on the side of the Indian tax office, Vodafone could end up owing twice the initial bill because of late payment fees, The Telegraph says. HSBC will attempt to grab a larger share of the British mortgage market this year as it prepares to lend at least £15bn to home buyers. The bank said it expected to help about 150,000 people to buy a house in 2012, including more than 27,000 first-time buyers to whom it intends to make £3bn of new borrowing available. Lending the money is expected to increase HSBC's share of the mortgage market to about 11pc, equivalent to the largest share of the market the bank has ever recorded. In the first half of 2011 the bank lent £6.7bn to home buyers, up 35% on the same period the year before. Figures for the second half of the year are not yet available, but are expected to be broadly in line with the first six months, The Telegraph explains. Britain has the highest level of debt among the major economies bar Japan, research has found. Over the past three years combined public and private sector borrowing has risen to more than 500% of national output. The alarming rise since the height of the financial crisis has been fuelled by debt in the financial sector as people seek to borrow their way out of the economic slump, according to consultancy McKinsey. Even at current trends it will take until 2020 for the UK to return to pre-2003 debt levels. Furthermore, UK lenders may have been more patient with homeowners in negative equity, which could be disguising the full extent of the mortgage debt problem, the report said. The 60-page report by McKinsey Global Institute compared major economies since 2008. The study said: 'Overall, the United Kingdom needs to steer a difficult course: reduce government deficits and encourage household debt reduction - without limiting GDP growth.'Record exports have helped drive a near-6% rise in the number of cars built in the UK last year. Industry figures yesterday revealed that a total of just over 1.3 million vehicles were manufactured in 2011, with 83% destined for overseas markets. Trade unions said the findings provided a "glimmer of hope in gloomy times" but analysts have warned about the potential fallout from the continuing Eurozone crisis and over-capacity in Europe's car production sector. A breakdown of the data showed exports - mostly for mainland Europe - were up 17% over the year, while production for UK showrooms fell 29%. (...) In contrast, there was a 30% slide in Honda production, an 11.5% reduction in the number of Minis made, 11.4% fewer Jaguars and 6.5% fewer Toyotas. The numbers can be skewed by the launch of, or lack of, new models, The Scotsman reports.David Cameron has marched onto territory staked out by Ed Miliband by promising that there would be no return to the "turbo-capitalism" of recent decades. In the third new year intervention by the main party leaders on what is being described as "responsible capitalism", the prime minister revived a signature theme of his time in opposition when he said he would preside over an era of "popular capitalism". "I want these difficult economic times to achieve more than just paying down the deficit and encouraging growth," he said. He also announced a co-operatives bill to give public sector workers a greater chance to create mutuals to deliver public services. "I want them to lead to a socially responsible and genuinely popular capitalism," he said. Miliband publicly welcomed the prime minister's decision to address issues he marked out in his Labour conference speech last year when he promised to champion "producer" businesses and to crack down on "predator" businesses. But in private, the Labour leader dismissed the speech as a "doughnut" - attractive on the outside, but with nothing in the middle, The Guardian says. AB