SAN FRANCISCO, July 19 — Sometimes what is good enough for Google is not good enough for Wall Street.

The Internet search giant reported another quarter of rapid revenue growth on the strength of its core Internet search and advertising business Thursday, but expenses grew faster than investors had anticipated and profits fell short of analysts’ expectations.

Within minutes of Google’s announcement, which was made after the close of markets, disappointed investors sold off Google’s shares in after-hours trading, slashing their value by about $42, or more than 7 percent, to about $506. Shares of Google had risen steadily in recent weeks, in part, on speculation that the company, which does not provide guidance about its expected financial performance, would surpass Wall Street estimates.

“The company spent too much, as they said they might some day,” said Jordan Rohan, an analyst with RBC Capital Markets. “It wasn’t a bad quarter. It was a quarter where the analysts’ models need to be reset at a slightly lower level of profitability, and that hadn’t happened in a while.”

Google said that second-quarter net income rose 28 percent to $925 million, or $2.93 a share, falling short of the $3.01 a share that Wall Street expected. Revenues rose to $3.87 billion, up 58 percent from the same quarter in 2006.

Revenues excluding commissions paid to advertising partners, a widely followed measure of the company’s performance, were $2.72 billion, up 63 percent from a year earlier, and slightly above Wall Street’s expectations of $2.68 billion. Excluding expenses like stock-based compensation, profits were $1.12 billion, or $3.56 a share, below the $3.59 a share that analysts expected.

Google’s executives said they were satisfied with the company’s performance.

“We were very pleased with how Google did this quarter, especially with revenue growth in a seasonally weak quarter, and with what appears to be an increase in rates of user traffic growth,” Eric E. Schmidt, Google’s chief executive, said in an interview.

Mr. Schmidt said that a larger-than-expected hiring spree, as well as a change in the way the company accounts for bonuses, had contributed to the higher expenses. Google added 1,548 workers in the quarter, or about the same as in the first quarter, to end the period with nearly 13,800 employees.

“We will watch this area very closely in the future,” Mr. Schmidt said.

Google, which is now larger than any of its rivals, is growing about seven times faster than Yahoo and twice as fast as eBay.

Still, as the company has continued to grow, its rate of growth has decreased. Second quarter year-over-year revenue growth, for instance, was 125 percent in 2004, 98 percent in 2005, 77 percent in 2006 and 58 percent in the most recent quarter. But that is not what worries analysts, for now. Mr. Rohan called it the “smoothest deceleration I have seen.”

Google has to spend on new businesses to keep the growth rate aloft. But if it spends too much, Wall Street punishes the stock.

“Eventually, yes, you can’t keep growing at the same pace,” said Christa Quarles, an analyst with Thomas Weisel Partners. “That’s why the ‘what’s next’ question gets asked.”

Google still earns the overwhelming majority of its revenue from text ads that appear next to search results and on many sites across the Web. But Google has been spending heavily in variety of areas including online video, with its purchase of YouTube; software applications that compete with Microsoft’s; radio, television and newspaper advertising; mobile phone technology; and a vast network of data centers that could become a platform for delivering the next generation of computing applications. But these efforts have yet to contribute to Google’s bottom line.

During a conference call between company executives and Wall Street analysts Thursday, the “what’s next” question inevitably came up.

Omid Kordestani, Google’s senior vice president for global sales and business development, responded that it was too early to see any material affect from any of those initiatives. “Hopefully, in the next few quarters, we can shed more light on this,” Mr. Kordestani said.

For now, the focus of investors has shifted to whether Google’s higher expenses are a temporary or longer-lasting issue.

“What everyone is trying to get a handle of what we can expect for the subsequent quarters,” Ms. Quarles said. “The question was asked in nine different ways.” True to its no-financial-guidance policy, Google executives declined to answer.

Some analysts took Thursday’s sell-off of Google shares in stride. “The stock has had a tremendous run over the last few weeks and months,” said Derek Brown, an analyst with Cantor Fitzgerald. “When you take a step back and consider what this business is doing, in absolute terms and relative to other leaders in the Internet sector, this business continues to shine.”