Search giant Google's second quarter profits rose 28 per cent to $925m (£451m), but fell short of analyst forecasts.

Google stock dropped 7 per cent on publication of the figures showing the company's net income of $3.56 (£1.73) per share, falling short of the $3.59 (£1.75) predicted by Reuters Estimates.

Profits are up 28 per cent year on year, from $721.1m (£351.3m) in Q2 2006, but dipped from the $1bn (£0.5bn) reported in the first quarter of this year.

Total revenues across the period totalled $3.87bn (£1.89bn), a year-for-year rise of 58 per cent.

Chief executive Eric Schmidt says Google's staff increases of 1548 between April and June affected the firm's results. Despite the pessimistic market reaction, the company expressed confidence in its figures.

'Our performance once again demonstrates the strength of our core search and ads business,' said Schmidt.

'The growth in our global traffic combined with our ongoing improvements in monetisation resulted in solid revenue growth, even in a seasonally slow quarter.'