Google (GOOG) today reported a year-over-year decline in fourth-quarter profit, hurt by $1.09 billion in write-downs related to AOL and Clearwire (CLWR). Operating earnings rose, however, and revenue climbed 18 percent to $5.70 billion from the year-earlier period.

Google’s revenue, excluding traffic-acquisition costs, was $4.22 billion, above the Thomson Reuters estimate of $4.12 billion. Earnings per share, excluding certain items, was $5.10, beating estimates. The company also announced plans for an options exchange program for workers whose stock options are underwater.

Updates from its conference call with analysts:

4:33 p.m.–The host introduces today’s conference call participants: Google CEO Eric Schmidt, dialing in from New York; CFO Patrick Pichette and SVP of product management Jonathan Rosenberg, in Mountain View, Calif.; and Omid Kordestani, SVP of global sales and business development, in London.

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When he joined the company last summer, Google CFO Patrick Pichette said he intended to “feed the winners” and “starve the losers.” Lately, insiders have begun crediting him for bringing new discipline to Google (GOOG).

One told us that Patrick has been “taking on a lot of the low-hanging fruit” and that “it’s going to make a difference in revenues over the next year.”

But while its true that since Patrick joined, Google (GOOG) has put its first ads against products like Google Images and Google Finance, the company still has a long way to go before there will be no–pick your metaphor–”losers” or “low-hanging fruit” left.

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