Welcome Back, Google!

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(A knock at the door.)

"Who is it?"

"Google (Nasdaq: GOOG  ) ."

"What do you want? This party is for 2009 growth stocks. You want the has-been crowd down the hall; I hear they're celebrating 2007 tonight. Perfect for you. Besides, Baidu's (Nasdaq: BIDU  ) here. So is (NYSE: CRM  ) . We've got the search engine and cloud computing markets covered already."

"Didn't you see my report last night? Net income was up 27% over last year! I booked $5.89 in earnings per share, 9% higher than Wall Street anticipated. And look ... (flashes huge wad of $100 bills) I've got more than $20 billion in cash and liquid securities!"

(Door unlocks, opens slowly.)

"Well then, my mistake. Come on in, my friend. It's good to have you back. What can I get you to drink?"

Yes, that's right, Fools: Google is back! Growth returned as aggregate paid clicks rose 14% over last year's third quarter. Cost per click declined 6% over the same period. The Big G is doing more with less, and it's showing it not only in higher net income but also in higher margins. Non-GAAP operating margin improved 370 basis points to 40.2%.

But efficiency's effects shine brightest on the cash flow statement. Cash from operations improved 25% over last year's Q3. Capital expenditures declined from $452 million to $186 million.

On its balance sheet, Google joined Apple (Nasdaq: AAPL  ) and Microsoft (Nasdaq: MSFT  ) in holding more than $20 billion in cash and liquid investments.

Interestingly, Google is cutting surgically, pruning where it can, but is being careful not to cut off growth. Witness research and development spending. Arguably Google's greatest strength (known as it is for a bevy of rapid, low-cost failures balanced against a handful of massive winners), this was up 7.5% during the third quarter. That's a good sign, and reflective of the company's never-ending pipeline of wannabe Big Ideas -- Fast Flip and Google Editions most recently.

Welcome back, Google. The growth-stock party wasn't the same without you.

Get your clicks with related Foolishness:

Apple is a Stock Advisor selection. Microsoft is an Inside Value pick. Baidu, Google, and are Rule Breakers recommendations. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers had stock and options positions in Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is still recovering from a party at a friend's place last night. 

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