Google beat Wall Street expectations in its first-quarter earnings, signaling that online advertising spending is back on track.

The search giant said net revenue–which excludes traffic-acquisition costs paid to partners–rose to $5.06 billion. Earnings per share rose in the first quarter of 2010 to $6.76, compared with $5.16 in the first quarter of 2009.

Net income climbed to $1.96 billion, or $6.06 a share, from $1.42 billion, or $4.49 a share in the same period last year, which was a 38 percent increase. Wall Street was expecting it to rise 30 percent.

It was a solid quarter for Google (GOOG), although not a barn burner, because investors expected it to do better than consensus.

Thus, Google’s stock price was down in after-hours trading about 3.5 percent to $575.84.

Encouragingly, paid clicks were up 15 percent, while revenue per click grew seven percent.

And as usual, Google was a money gusher, with $27 billion now in the kitty, giving the company the ability to buy whatever it likes.

“Google performed very well in the first quarter, with 23 percent year over year revenue growth driven by strength across all major verticals and geographies,” said Patrick Pichette, CFO of Google, in a statement. “Going forward, we remain committed to heavy investment in innovation–both to spur future growth in our core and emerging businesses as well as to help build the future of the open web.”

BoomTown liveblogged the earnings call, which began at 1:30 pm PT.

Google execs, well known for saying little, are unlikely to say much about the following: Its fight with China, its fight with Apple (AAPL) in the smartphone arena and more, and its possible fight with regulators over the mobile ad market related to its AdMob acquisition.

Here is Google’s slideshow about the first quarter:

And here is the official press release:

2010Q1_earnings_google

Please see this disclosure related to me and Google.

Top line for Google’s Q2 earnings: Net revenue of $4.07 billion and earnings of $5.36. The Street was looking for net revenue of $4.05 billion and earnings of $5.05.

CEO Eric Schmidt isn’t overly effusive: “Google had a very good quarter, especially given the continued macro-economic downturn. While most of the world’s largest economies shrank, Google’s year-over-year revenues were up 3%. These results highlight the enduring strength of our business model and our responsible efforts to manage expenses in a way that puts us in a good position for the economic upturn, when it occurs.”

Meanwhile paid-click growth was up 15 percent, and the company continues to clamp down on expenses: Google’s headcount actually shrank in the last three months, from 20,164 to 19,786 full-time employees.

I’ll be listening in on the call and occasionally updating here.

• Schmidt: “Youtube is now on a trajectory we’re very pleased with.”
• “Too early to tell when the recovery will materialize.”
• CFO Patrick Pichette: Still hiring, but decrease in headcount came from previously announced layoffs.
• Product SVP Jonathan Rosenberg: We’re focusing more than ever on power users.
• Mobile monetization picked up, driven by smart phones. YouTube’s monetized views have tripled in the last year.
• Sales boss Nikesh Arora: Small advertisers have stayed consistent during downturn, and larger advertisers who have been on sidelines are coming back.
• Schmidt on Chrome OS: We’re talking to manufacturers about designing “products that are very, very exciting.” Will Chrome run on existing hardware? Available for download? Still to be worked out.
• Was June soft? Schmidt: We generally don’t parse interquarter trends. On YouTube: Monetizing “billions of views” per months. [Nothing approaching real numbers or real context].
• Arora: “Significant sellthrough” in markets where Google has YouTube homepage for sale. Next phase of YouTube sales emphasis will be preroll ads on short-form videos.
• Arora on YouTube “trajectory” comment: We’re excited about getting pieces in place to drive this forward [i.e., not talking about numbers]. Customers accepting YouTube ads: “It’s becoming accepted user behavior where they’re going to watch premium content that people have invested in, they’re going to watch pre-roll ads.”
• Is YouTube profitable? Pichette: We don’t give out economics. But in the not-too-distant future, we see it being very profitable.

Here again, per Citigroup’s Mark Mahaney, is a crib sheet for interpreting the results (click to enlarge):

And here are the slides from Google’s investor presentation:

2009Q2_google_earnings_slides –

There is no doubt that Microsoft is pulling out the stops with the launch of its renovated search service, now called Bing, spending $100 million in marketing dollars.

But besides lifting the software giant’s share of the search market in early surveys, has it also given Microsoft’s (MSFT) stock an added boost?

Yes, indeed, but only over the last 30 days.

Here are some pertinent stock price data, using the No. 1 Google (GOOG) and the No. 2 Yahoo (YHOO), Microsoft’s search rivals, as comparison:

Since the beginning of the year, the shares of all three were up strongly–Google is up almost 32 percent, Yahoo is up 20.3 percent and Microsoft is up 20 percent.

But if you narrow that to just a month, which is about the time frame since Microsoft launched Bing–by CEO Steve Ballmer at the D: All Things Digital conference, by the way, in a highlight video you can see below–the stocks show some interesting changes.

Google is up just over three percent in the 30 days and Yahoo is down two percent. And Microsoft? Up more than 18 percent (see the chart below; click on it to make it larger).

That pop is likely due to a perception of momentum from continuing market share reports showing the early promise of Bing, which has also gotten good reviews so far as an innovative product.

That includes yet another yesterday by Efficient Frontier showing Microsoft’s share of paid clicks continued to rise.

Said search-engine marketing firm Efficient Frontier in a blog post:

“According to our data analysis, Bing expanded its share of paid clicks for the two weeks post launch. Bing’s share of paid clicks is up 13% for the second week post launch as compared to pre-launch. And, it represents an incremental 5% lift over the first week.”

The blog also correctly added: “However, as Danny Sullivan rightly cautions in a recent blog post on Bing, two weeks does not make a trend.”

Nope, but it is a nice boost for Microsoft shareholders, who have not had a lot of those of late–its stock is down 17.3 percent since last year and 17.7 percent since five years ago.

And here is the video of Ballmer launching Bing at D7 in an interview by Walt Mossberg: