Yet, the Street chose to focus on Google's declining margins. In previous earnings reports, consolidated revenue had been significantly higher than net revenue. In this instance, the role has been reversed.

I think investors have missed how important this is. You'll get no argument from me that the six-point decline in gross margin was unsettling. But what else do you expect?

As I've detailed above, Google is not operating like a mature company that is content with living off its historical accomplishments. Google is operating as a startup and is spending tons of cash by taking on several new projects.

Besides, let's not pretend that this quarter was a complete disaster.

Google bears who can't stomach the $900 stock price insist on pounding the obvious -- laboring on the 4% decline in operating margin. Yet, despite the weak margins, the company still managed to grow non-GAAP operating income by roughly 3%. What this means is that management was able to figure out ways to squeeze every available penny out of every dollar it generated in revenue.

What's more, there will be a time when the Motorola business is no longer impeding the company's momentum. At that point Google might have already shifted direction into another venture. That is to be expected.

In other words, volatility and profit swings should also be expected. I love solid margins just as much as the next analyst, but in Google's case, we need some perspective.

I'm not suggesting that Google is flawless. But there's no denying that the company operates a sound business, even amid rising operating expenses -- as scary as they are.

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