Shares of Google [NASDAQ:GOOGL] skyrocketed 16.26% on Friday to close at all-time high of $699.62 a share after its second quarter earnings report beat estimates and that new CFO Ruth Porat hinted to investors there will be no more wild spending or moonshot projects. In the past, Google has spent billions on data centers, research and development on projects from renewable energy and internet balloons to robotic dogs. Google also slowed down its hiring, as they added just 1,719 employees in the second quarter, the smallest increase since the fourth quarter of 2013.

In the second quarter 2015, the company reported total revenues of $17.73 billion, up 11.09% compared to $15.96 billion in the same quarter 2014. Excluding traffic-acquisition costs (TAC), revenue was $14.35 billion up 13.35% compared to $12.66 billion in 2014. GAAP net income was $3.93 billion, or $4.93 diluted EPS for Class A and B of common stock and $6.43 diluted EPS for Class C capital stock, compared to $3.35 billion or $4.88 diluted EPS for Class A, B common stock and C capital stock in the same period last year. 

Non-GAAP net income for the second quarter 2015, which excludes net loss from discontinued operations and other, was $4.83 billion, or $6.99 diluted EPS for Class A, B common stock and C capital stock, up 16.98%, compared to $4.1 billion or $5.98 diluted EPS in 2014. Wall Street expected non-GAAP adjusted earnings of $6.70 a share and revenue excluding TAC of $14.27 billion for the quarter. 

For clarification, Google’s Class A shares have one vote each while the Class B shares, which do not trade in the public market, are owned by Google insiders and get ten votes each. After the company's 2-for-1 stock split in April 2014, Class A shareholders received one additional share of Class C capital stock [NASDAQ:GOOG] for each Class A share. GOOG is publicly traded but has no voting rights.

Digging deeper into Google's financial statements, total advertising revenues for the second quarter were $16.02 billion, or 90.63% of total revenues, up 11% year-on-year. The total advertising revenues came from its own websites, $12.4 billion, and its network member websites, $3.62 billion. The advertising revenue growth is neither accelerating nor decelerating, as the year-on-year growth of the total advertising revenues in the first quarter 2015 was about the same. In the first quarter 2015, Google reported total advertising revenues of $15.51 billion or 89.86% of total revenues, up 11% year-on-year.

The bulk of Google’s revenues still come from advertising revenues, which grow about 11% year-on-year. It seemed to have worked out well for Google in the second quarter as growth in aggregate paid clicks were up 18% year-on-year, compensated by a deceleration in aggregate cost–per-click, down 11% year-on-year. The concern is that revenues from its network member websites show no significant growth, as both their paid clicks and cost-per-click numbers continue to decline.

Google said its GAAP UK revenues in the second quarter were $1.68 billion, or about 10% of its total revenues. Starting on April 1, 2015, the U.K. Government introduced a new Diverted Profits Tax (DPT), informally known as “Google Tax”, which was set at a deliberately punitive rate of 25% if income is routed via "contrived arrangements" to tax havens, compared to the 20% U.K. corporation tax rate. It is not quite clear from the press release whether Google has started paying the U.K. corporate tax or not. Google, however, said that their effective tax rate in the second quarter 2015 was 21%, compared to 22% for the same period last year.

The major takeaway from Google's second quarter earnings report may be their YouTube video-sharing website. According to the Business Insider, total YouTube "watch time" in the second quarter jumped 60% year-on-year, its fastest growth rate in two years. On mobile devices, the average viewing session is now more than 40 minutes, up more than 50% from a year ago. How much this will translate into revenues is anyone's guess, as Google does not release YouTube revenue figures or break them out in their public filings. 

According to the eMarketer’s estimate, YouTube generated about $5.6 billion in gross revenue in 2013. Google shared revenues with advertising partners and content creators and kept about 35% of the gross revenue, or about $1.96 billion.

YouTube might soon be facing tough competition from Facebook [NASDAQ:FB], as Facebook is building an ad exchange that will let publishers sell their ads through real-time auctions, according to AdAge. LiveRail, the video ad-tech firm acquired by Facebook in August 2014 for $400-$500 million, will operate the exchange and handle video and display ads. 

There is some downside risk for Google's stock if they are unable to renew a contract with Apple [NASDAQ:AAPL], up for renewal sometime this year, for mobile Safari toolbar searches on the iPhone and iPad. Analysts estimate that Google paid between $1 billion and $2 billion to Apple in exchange for making Google the default search engine in Safari on iOS and OS X, while generating about $9 billion in mobile search ad revenue. 

In fact, Apple has been working on Spotlight, a search interface, for years. Spotlight is used to search local files on a Mac, but also performs day-to-day Web searches. According to the Motley Fool, Microsoft's [NASDAQ:MSFT] Bing displaced Google in 2014 in OS X Yosemite and iOS 8 as the backend provider of Spotlight's Web search results. 

Last month, Apple said that the company will allow app developers to tap into Spotlight for indexing user searches when iOS 9 is released. With Spotlight’s application program interface (API), Apple is building a new kind of search engine that has deep access to the data that apps make available on the iPhone, while trying to keep users away from the traditional search engine. Therefore, it is anyone's guess who will be the winner, or loser, if Apple decides to ditch Google. 

Technically, GOOGL broke down the 200-day SMA and was ready to break through the four-year trendline support at $540 levels at the beginning of July, the same time that rumors surrounding a potential merger of Twitter Inc [NYSE:TWTR] and Google were making the rounds on financial media. Some might speculate that there could be a sell-off if Google acquires Twitter, as Twitter's market cap was near $22.7 billion. Some analysts believe that Twitter’s fair value was just about $13.1 billion, after their disastrous first quarter earnings report.

None of those events materialized and the stock bounced off the four-year trendline support and skyrocketed through the top trendline resistances of the symmetrical triangles. GOOGL is now trading at the top of the range and may pull back, as both the relative strength index (RSI) and moving average convergence divergence (MACD) are in extremely overbought territories.

According to Yahoo Finance, the stock has a one-year price target of $716.55 a share. Google will release its third quarter 2015 earnings report in October. Wall Street is expecting revenues of $18.56 billion, up 12.3% year-on-year, and an EPS of $7.20 per share, up 13.4% year-on-year.

Disclosure: No positions in GOOG or GOOGL with no recommendations. Long position in AAPL but no positions in the other companies mentioned.