UPDATE 4-Google quarterly results fail to excite

* Q2 EPS ex-items $5.36 vs Wall St view $5.08

* Q2 revenue $5.52 bln vs Wall St view $5.49 bln

* Shares down 3 pct in after-hours trade (Adds analyst comment, CEO quote, tax rate, other details)

By Alexei Oreskovic

SAN FRANCISCO, July 16 (Reuters) - Google Inc's (GOOG.O) quarterly profit beat Wall Street expectations, but the weak economy and slump in advertising spending took a toll on revenue growth and the price of its search ads.

Shares of Google fell 3 percent after the results, which exceeded average forecasts but failed to live up to the heightened expectations of investors following Intel Corp's (INTC.O) strong earnings earlier this week. Google shares have risen 4 percent since Intel's report on Tuesday.

"They did decently, but obviously it's not high enough for the Street," said Laxmi Poruri, an analyst at Primary Global Research.

Google's revenue in the second quarter rose 3 percent to $5.52 billion, compared with the average analyst forecast of $5.49 billion, according to Reuters Estimates.

Excluding traffic acquisition costs -- the portion of revenue that is shared with Google partners -- revenue was $4.07 billion.