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Updated from Thursday, Oct. 15

NEW YORK (

TheStreet

) --

Google

(GOOG) - Get Alphabet Inc. Class C Report

blew past analysts' targets on a solid return of ad spending.

Google shares were trading higher at $549.20 in the premarket session on Friday. It closed Thursday at $529.91.

The Internet search giant posted adjusted earnings of $5.89 a share from $4.92 in the year-ago period and better than the adjusted profit of $5.40 analysts were looking for, according to Yahoo! Finance.

Sales, excluding $1.56 billion in traffic acquisition costs, were $4.38 billion for the quarter ended last month. That number was up nearly 8% over the $4.04 billion level last year and well above the $4.24 billion analysts were expecting.

"While there is a lot of uncertainty about the pace of economic recovery," CEO Eric Schmidt said in a press release, "we believe the worst of the recession is behind us and now feel confident about investing heavily in our future."

Investors had been looking for a healthy top-line number in hopes that ad spending was starting to return after a tough year when the financial crisis clamped down on advertising budgets. Google's big beat is good news for search rivals

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On a conference call, Google executives fielded questions from analysts via email. Analysts asked about Google's growth initiatives.

In its wireless operating system Android, CEO Schmidt said "Android adoption is about to explode." Schmidt was referring to the abundance of Google phones due to arrive later this year and next year. Schmidt said mobile search grew 30% over the second quarter.

Asked about progress on YouTube, which has been estimated to lose as much as $500 million last year, Google executives said they were encouraged.

"YouTube is going very well," Google CFO Patrick Pichette said. "We are on a path to profitability in the not too distant future." As an example, Google says it collects ad sales money from "more than a billion videos a week." Presumably, the so-called monetization of YouTube involves a penny-by-penny collection process as users play videos with ads embedded at the bottom of the screen.

As for cash, Google generated $2.54 billion in free cash flow and had $22 billion in cash on its books. Analysts asked if the company would consider using its vast cash pool to buyback stock.

Schmidt said he didn't anticipate any stock repurchase plans. We are "happy to have it sitting in our bank account earning a modest interest rate," Schmidt said.