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Internet search giant, Google, reports experiencing signs of stabilization in what has been a tumultuous advertising environment.

Google’s Chief Executive Officer Eric Schmidt said consumers are still spending less than they did before the economic crunch, but at least they are clicking around and searching for deals. Google reported an increase in the number of clicks for the second quarter of 2009 compared to the same period in 2008. The cost per click, however, was down.

The company’s net income for April to June of this year increased at 19 percent to $1.48 billion or $4.66 per share compared t $1.25 billion or $3.92 per share for the same period last year.

The company reported earnings of $5.36 per share, without one time charges. This was significantly higher than the $5.09 per share earnings forecasted by analysts polled by Thomson Reuters.

One analyst, Trip Chowdhry, managing director of Global Equities Research claimed that Google posted such profits due to unexpectedly low tax rates. He explained that analysts mostly made their forecast based on a 25 percent tax rate but Google’s effective tax rate was only at 20 percent.

Google also managed a sales increase of 3 percent to $5.337 billion. Sales netted $4.07 billion beating estimates of $4.06 billion.

Schmidt said that Google had a very good quarter considering the current economic situation. “These results highlight the enduring strength of our business model and our responsible efforts to manage expenses in a way that puts us in a good position for the economic upturn, when it occurs,” he offered.

Analysts, however, dismissed Google’s gains. Chowdhry observed that though there were increases in sales, the company’s growth rate has been declining over the past seven quarters.

In the last quarter of 2008, the company incurred its first ever profit drop as it was severely affected by a pullback in advertising dollars at the height of the recession.

Signs that Google’s main source of revenue is slowing down have been evident. Though the number of paid clicks increased by 15% over the second quarter of 2008, it fell 2% over the first quarter. Cost per click was 13% down at the same period in 2008 but increased by 5% in the first quarter of this year.

Schmidt though remained positive, maintaining that consumers clicking is a sign of stabilization. “We are not at a moment looking at that downward spiral that we though we were six months ago,” he said.