Updated from July 17

SAN FRANCISCO -- Just when


(GOOG) - Get Report

had managed to erase doubts about its ability to perform in a down economy, now it must start all over again.

The tech giant missed Wall Street's estimates for the second quarter, sending the stock price back near levels where it had hovered in April, when investors had anticipated a weak first quarter.

Google proved investors wrong by topping first-quarter estimates, but could not pull off a similar performance Thursday when reporting second-quarter numbers. As a result, shares took a beating, falling 8% to $490.23 in after-hours trading.

The company earned $1.25 billion, or $3.92 a share, in the second quarter compared to $925.1 million, or $2.93 a share a year ago. Adjusted for certain items, the company earned $1.47 billion, or $4.63 a share, falling well short of analysts' estimates of $4.74 a share.

Second-quarter revenue climbed 39% from a year ago to $5.37 billion, but grew by a mere 3% from the first quarter. Adjusted for traffic acquisition costs, revenue came in at $3.9 billion, above analysts' consensus expectation of $3.87 billion.

Paid clicks, or the number of times users click on ads, also experienced some weakness. In the second quarter, it grew 19% over the same period a year ago, but declined 1% from the first quarter.

Despite all this, Google Chief Executive Eric Schmidt continued to maintain that the company is in a strong position, even in a slowing economy.

"There is obviously evidence of a slowdown in the U.S. and Europe -- you read it in the paper everyday," Schmidt told analysts on a conference call Thursday. "We continue to believe that we are very, very well-positioned in such a slowdown and especially if it gets worse."

Google Chief Economist Hal Varian noted that search-query growth has been positive but is also seeing some softening in sectors such as auto and real estate financing.

He said that consumers are becoming cautious in their spending both online and offline, but the last thing advertisers want to do is cut their budgets for search ads.

Investors may need more convincing, especially since they're particularly sensitive to the economy and have been carefully monitoring Google for any signs of weakness.

Nonetheless, the company has been showing signs of strength, particularly in the international market, which makes up 52% of its total revenue. In the second quarter, Google pulled in $2.8 billion in revenue from overseas.

Google-owned sites generated revenue of $3.53 billion, or 66% of total revenue, in the second quarter, marking a 42% increase from a year ago but only a 4% increase over the first quarter.

Google's partner sites generated revenue through the company's AdSense programs of $1.66 billion, or 31% of total revenue, in the second quarter -- a 22% increase over network revenue from a year ago but a 2% decline from the first quarter.

Although Google realized its first full quarter of revenue from its acquisition of DoubleClick in the second quarter, executives wouldn't disclose the business's contribution. Google won regulatory approval earlier this year for DoubleClick, for which it paid $3.2 billion in an effort to break into the lucrative display advertising market.

Contributions from online video site YouTube also remained vague as Schmidt and others admitted that they still haven't found the best way to monetize on advertising.

Google wasn't the only big tech name reporting after the close, as


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(IBM) - Get Report



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also posted their numbers.