Despite having notched up a marked rise in quarterly revenue and profits, Google has failed to impress the analysts at Wall Street. This is despite having demonstrated a significant increase in net profit and revenues as compared to the same quarter last year.

Google reported revenues of $6.82 billion in the second quarter of 2010, representing a 24% increase over second quarter 2009 revenues of $5.52 billion. However, analysts had expected better. They pinpointed to rising operating expenses as the biggest cause of disappointment. This resulted in a dip of investor confidence with shares falling more than 4% during after-hours trade.

This is due to the fact that Google has increased the workforce to 21,805 full-time employees as of June 30, 2010, up from 20,621 full-time employees. This addition of almost 1200, has lead to increased expenses for the post-September period. Also, Google is choosing to focus more on research and development as compared to sales and marketing, as is the usual norm.

“Google had a strong second quarter,” said Eric Schmidt, CEO of Google. “Solid growth in our core business and very strong growth in our emerging businesses drove 24% revenue growth year over year. We saw strength in every major product area, as more and more traditional brand advertisers embraced search advertising and as large advertisers increasingly ran integrated campaigns across search, display, and mobile. We feel confident about our future, and plan to continue to invest aggressively in our core areas of strategic focus.”