GOOGLE said last night that it more than doubled profits in the second-quarter, maintaining the company’s record of beating analysts’ forecasts and underscoring the advantage it has built over its chief rivals.

The California-based search group brushed aside fears over slowing growth as it reported net profits of $721.1 million (£392 million), or $2.33 per share, in the three months to the end of June. That compared with net profits of $342.8 million, or $1.19 per share, for the same period last year.

The company said that, excluding expenses for employee share options and other one-off items, it would have earned $2.49 per share — well above the market consensus of $2.22.

It marks the seventh time in eight quarters as a public company that Google has surprised Wall Street analysts by turning in higher than expected earnings, as online advertising revenues soared.

Revenue for the period totalled $2.46 billion, a 77 per cent increase from $1.38 billion a year ago.

Fears that the group would indicate slowing growth prompted a 3 per cent fall in Google's share price to $387.12 on Nasdaq yesterday, ahead of the results, which were released after the close of trading. However the shares bounced 1.4 per cent in extended trading after the results.

Google’s performance contrasted sharply with the second-quarter figures from Yahoo! earlier this week, which disappointed investors by merely matching Wall Street’s consensus estimate. It then exacerbated the disappointment by postponing the introduction of a key piece of advertising technology aimed at boosting its revenue.

Google seems determined to widen its formidable lead in internet search — a field in which it has been so dominant in recent years that the company’s name has become accepted as a verb for looking things up.

Eric Schmidt, Google’s chief executive, said: “Our strong performance results from our clear focus on increasing the quality of user experience, particularly in search and ads.”

He added: “We’re very, very happy with having such a strong quarter in a seasonally weak period for us. It looks like our model continues to work extremely well.”

Investors have recently expressed concerns about maturing growth in the industry, and the need by Google and others to spend more on product development. Last night it reaffirmed that it will invest at a considerably higher rate in computers, networks and data centres than its expected rate of revenue growth in 2006.

The market is still divided over whether Google, which enjoys growth rates three-to-four times faster than other major internet companies, is vulnerable to slowing industry growth trends or is itself a disruptive force taking share from rivals.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive