Strong advertising sales helped Google report a 58% revenue increase for its second fiscal quarter and the market leader turned over $3.87bn ( 5.8bn) between April and June, up from $2.46bn last year.

Chief executive Eric Schmidt told analysts an influx of 1,500 new staff meant operating income dropped to $1.1bn from $1.22bn last quarter, but this didn't stop Google stocks dropping 7% on the markets after publication as its earnings per share "gure of $3.56 was three cents below Wall Street expectations.

A broadside published last week by Scott Cleland claiming Google's merger with ad giant DoubleClick will create an internet advertising 'Googleopoly' didn't inspire confidence either as the president of tech consultancy Precursor advised US Congress and the Federal Trade Commission to block the $31. bn deal.

Meanwhile, Yahoo reported profits down for the sixth quarter in a row, with earnings of $161m compared to $158 for its second quarter last year.

Advertising was an issue for Yahoo and the company reduced its full year income forecast by $200m because of weak display ad sales.

Yahoo co-founder Jerry Yang has a new management team installed and said he is beginning a 100-day strategic review of the firm.

Microsoft broke through the $50bn revenue barrier last week with annual turnover of $51.25bn including $13.37bn for the second quarter of 2007. This represents a 13% improvement year-on-year.

The market reacted cautiously however with analysts perturbed by a $749m charge to extend the warranty life of faulty X-box consoles, and concern that Microsoft's first quarter after launching its flagship Vista product should have showed better operating system sales.