Mountain View (CA) – Shares of Google sank nearly $41 after profits rose slower than expected in the second quarter.  The company earned $1.25 billion profit which was 35% higher than the same period last year, but investors weren’t impressed.  In after hours trading, Google is currently down $40.75 to $492.69 a share (as of 4:45 PM Pacific).  Company executives place some of the blame on the economy, while some analysts believe the company spent too much money on research.

Google revenues rose 39% to $5.4 billion and ad-clicks climbed 19%.  On a per share basis, profits were $4.63/share which fell short of $4.74/share expected by Wall Street.  The market immediately reacted and share prices immediately fell by 2% and it continues to fall in afterhours trading.  The stock price drubbing may actually be caused by Google’s previous success.  The company has consistently posted earnings above analyst expectations and these results are the first time the company has missed beating expectations in more than a year.

Last month, Google and Yahoo agreed to partner to serve Google ads on some Yahoo searches.  That agreement is currently being reviewed by the federal government for possible antitrust issues.

Isn’t it great that a company can profit $1.25 billion in a quarter and still be killed in the stock market?  Perhaps Google can lend AMD a few hundred million, it looks like they could really use it.