Top line for Google’s Q2 earnings: Net revenue of $4.07 billion and earnings of $5.36. The Street was looking for net revenue of $4.05 billion and earnings of $5.05.

CEO Eric Schmidt isn’t overly effusive: “Google had a very good quarter, especially given the continued macro-economic downturn. While most of the world’s largest economies shrank, Google’s year-over-year revenues were up 3%. 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.”

Meanwhile paid-click growth was up 15 percent, and the company continues to clamp down on expenses: Google’s headcount actually shrank in the last three months, from 20,164 to 19,786 full-time employees.

I’ll be listening in on the call and occasionally updating here.

• Schmidt: “Youtube is now on a trajectory we’re very pleased with.”
• “Too early to tell when the recovery will materialize.”
• CFO Patrick Pichette: Still hiring, but decrease in headcount came from previously announced layoffs.
• Product SVP Jonathan Rosenberg: We’re focusing more than ever on power users.
• Mobile monetization picked up, driven by smart phones. YouTube’s monetized views have tripled in the last year.
• Sales boss Nikesh Arora: Small advertisers have stayed consistent during downturn, and larger advertisers who have been on sidelines are coming back.
• Schmidt on Chrome OS: We’re talking to manufacturers about designing “products that are very, very exciting.” Will Chrome run on existing hardware? Available for download? Still to be worked out.
• Was June soft? Schmidt: We generally don’t parse interquarter trends. On YouTube: Monetizing “billions of views” per months. [Nothing approaching real numbers or real context].
• Arora: “Significant sellthrough” in markets where Google has YouTube homepage for sale. Next phase of YouTube sales emphasis will be preroll ads on short-form videos.
• Arora on YouTube “trajectory” comment: We’re excited about getting pieces in place to drive this forward [i.e., not talking about numbers]. Customers accepting YouTube ads: “It’s becoming accepted user behavior where they’re going to watch premium content that people have invested in, they’re going to watch pre-roll ads.”
• Is YouTube profitable? Pichette: We don’t give out economics. But in the not-too-distant future, we see it being very profitable.

Here again, per Citigroup’s Mark Mahaney, is a crib sheet for interpreting the results (click to enlarge):

And here are the slides from Google’s investor presentation:

2009Q2_google_earnings_slides –

The layoffs are companywide. The company tells us it is not shutting down the New York office of Rhapsody America, the music subscription service that Real runs as a joint venture with Viacom’s (VIA) MTV as Gawker reported this morning. The corporatewide layoffs were first reported by CNET.

Other details relevant to laid-off employees:

• All are on payroll through the end of the year
• Each will be offered a cash severance package based on length of service
• Said severance package will include six months of paid COBRA
• Etc., etc.

Real PR boss Bill Hankes has more details at the company’s blog.

This isn’t a total shock. The previous quarter, AOL had only been able to manage two percent advertising growth, and the company had already signaled since then that both its display ad business and its ad network were struggling. But given that these results cover the three-month period that ended Sept. 30, which only included a couple weeks of flat-out economic collapse, there will be worse news in store for the last quarter of the year.

Total revenues at the unit, owned by Time Warner (TWX), dropped 17 percent, to $1 billion. The bulk of that is attributable to its declining (down 26 percent) subscription business, so that number is less relevant–except to whoever may be in the market for one or both parts of the unit, like Yahoo (YHOO). Things would have been even worse, by the way, if AOL’s paid-search business hadn’t ticked up.

Overall results at Time Warner were flat for the year, with revenues of $11.7 billion and earnings of 30 cents per share. CEO Jeff Bewkes also announced that 2008 earnings would be lower than previously forecast due to restructuring charges, but that cash flow would actually be higher than the company had predicted.

Revenues at its to-be-shrunk Time Inc. publishing unit dropped seven percent, pushed down by an eight percent drop in ad revenue. The good news is that online revenues of $13 million, driven primarily by SI.com, People.com and CNNMoney.com, helped cushion some of the blow. The bad news is that those numbers are down from $19 million in the previous quarter.

Other results:

• Cable: Revenues up eight percent; adjusted operating income up nine percent.
• Movies: Revenues nine percent (“The Dark Knight” did great, but not as well as “Harry Potter,” “Rush Hour 3″ and “Hairspray” last year).
• Cable TV networks: Revenues up seven percent. Both subscription fees and ad revenues were up.