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Google (NASDAQ:GOOG) reported second quarter earnings of $925 million, or $2.93 a share, but that wasn’t enough to satisfy Wall Street. Excluding charges, Google reported earnings Thursday of $1.12 billion, or $3.56 a share. According to Thomson Financial, Google was expected to report earnings of $3.59 a share.

On the revenue front, Google reported revenue of $3.87 billion including $1.15 billion in traffic acquisition costs [TAC]. Backing out those traffic costs Google had revenue of $2.72 billion. Wall Street estimates were $2.68 billion.

On the conference call CEO Eric Schmidt noted that the second quarter is seasonally slow, but the company weathered it well. He also noted that the usual summer slowdown seems less than expected, but traffic is expected to fall in the third quarter. “When I look at the quarter, we’re very pleased with what we’re delivering,” said Schmidt.

Sergey Brin, president of technology, touched on Google’s international efforts. The main item was that Google is experimenting with various home pages in Asia to address local audience habits. In the U.S. he also said that gadgets were a boon to the iGoogle home page.

Schmidt added that iGoogle’s success shows how the company’s model can scale from no users to millions quickly.

Google executives addressed a wide range of issues on the conference call. Among some of the more notable items:

  • Content fingerprinting is near? Experiments are running and working quite well, said Google officials. The company plans to deploy the technology in the “near future.” Brin noted there haven’t been any serious impediments to rolling it out.
  • Executives were mum on metrics behind new print and radio advertising initiatives. When asked about whether the print and radio advertising projects would add material revenue, executives said early adoption was good. However, it’s far too early to project anything. “We really need to prove this model before advertisers and publishers before we scale it,” said Brin.
  • Display and video advertising will be a big part of Google’s revenue mix–someday. Today, display and video advertising amount to nothing more than a rounding error for Google. Executives noted that they expect display and video ads to contribute in the future. This assertion probably assumes that Google closes its DoubleClick (DCLK) purchase.
  • EBay’s (NASDAQ:EBAY) pullback didn’t hurt Google. Officials noted that eBay’s recent move to pull Google ads didn’t impact the quarter. While it’s true eBay changed its advertising spending plans, Google executives argued that the search giant was delivering the highest quality ad.

Other odds and ends from the Google statement (all revenue figures include TAC):

  • Google said Google-owned sites had revenue of $2.49 billion, or 64 percent of the total. That’s up 74 percent from a year ago.
  • Network revenue through AdSense was $1.35 billion. That’s up 36 percent from a year ago.
  • International revenue was $1.84 billion. Google noted it got a currency bump that amounted to about $35 million. In the U.K. revenue was $600 million.
  • Expenses were up sharply in the quarter to $1.21 billion. In the first quarter Google reported expenses of $972 million.
  • Other cost of revenue–which is defined by data center operations, credit card processing charges and content acquisition costs–came in at $412 million, up from $345 million in the first quarter.
  • Capital expenditures (also known as Google’s IT spending) were $575 million in the second quarter. That covered data centers, servers and networking equipment.
  • Google had $12.5 billion in cash as of June 30 and 13,786 employees. The employee count on March 31 was 12,238.

While Google was getting crushed in after-hours trading, down $38 to $511, the search giant’s presentation puts the company’s growth in perspective.

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The takeaway: Google’s results are still impressive. It’s just the stock was priced for perfection.

Source: Google Isn't Perfect, But Earnings Should Be Put Into Perspective