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The financials for Google's second quarter of 2007 proved uninspiring for Wall Street as earnings missed expectations, and Google blamed a higher headcount for rising expenses.

Googlers Hurt Google's Numbers

Free meals will probably continue, but it doesn't look like Google's existing staff will see a lot of new co-workers join the company in the coming quarter. Although Google's numbers were very good, they lacked the Googlely greatness of prior quarters.

Blame it on operating expenses, which includes costs like payroll. Thirty-one percent of revenues paid for things like Google's heavily expanding ad sales staffs in places like New York and Chicago.

CEO Eric Schmidt suggested during the earnings conference call that they overhired during the quarter. Google will watch headcount on a going forward basis.

That doesn't suggest a headcount bloodbath will take place. Wall Street investors love nothing more than seeing workers kicked to the curb, but without a signal from Google that a lot of parking places were about to open up at the Googleplex, they reacted as one might expect.

That reaction has pummeled shares of Google in after hours trading. Shares dropped as low as $504.69 before recovering to about $509. At market close, Google traded at $548.59.

Friday's open will be something to watch, especially since the company Google supposedly threatens greatly, Microsoft, saw its quarterly profits rise seven percent. That happened despite a billion-dollar cost Microsoft will incur to fix faulty Xbox 360 gaming consoles.