Google's second-quarter profits more than doubled as it continued to increase its share of the search advertising market and invest in R&D to improve its core products.

While Yahoo's shares slumped because it delayed the debut of its new search ad system, Google has steadily improved its products, and is expected to spend $1.2 billion on R&D this year, nearly 150 percent more than the last - 70 percent of it on its core search and search advertising products, writes Business Week.

Google exceeded analysts' expectations for sales as wells as profit, reports the New York Times. Google earned $721.1 million, or $2.33 a share in the quarter, compared with $342.8 million, or $1.19 a share, in the year-ago period. Excluding charges related to stock-based compensation and the gain from the sale of its Baidu share, Google earned $2.49 a share, beating the $2.22 that analysts expected.

Google's revenue was $2.46 billion, up 77 percent. Excluding fee payments to search partners, revenue was $1.67 billion, up 88 percent - and higher than the $1.65 billion that analysts expected. Revenue from Google's own network of sites continued to grow faster than that from others to which it provides ads. Google sites produced revenue of $1.43 billion, up 94 percent. Revenue from other sites, minus fees paid them, was $212 million, up 56 percent.