Don't let anybody kid you into thinking that Google (NASDAQ:GOOG) is immune to the advertising market's meltdown. It just has a better way of overcompensating.

The average cost for an advertiser to receive a lead through Google fell by a sharp 13% in the second quarter, relative to what sponsors were willing to pay a year ago. The upside here is that Google was able to deliver 15% more clicks than it did a year ago.

Net revenue, after subtracting traffic acquisition costs from gross revenue, rose by 4% to $4.06 billion. This is the second straight quarter of sequential declines in net revenue for Big G.

Things look better on the bottom line, though, as Google's margin-widening ways have non-GAAP earnings climbing by 16% to $5.36 a share. Analysts were banking on a profit of just $5.09 a share.

Beyond the sequential top-line dip and the plunge in click costs, the only other problematic nugget in the report rests in the amount that Google is paying its AdSense members.

Third-party publishers generated $1.68 billion in gross revenue for Google, as a result of syndicating the search giant's contextual marketing ads across their sites, blogs, and YouTube clips. Google paid them $1.24 billion for their efforts, or nearly 74% of the gross revenue that AdSense publishers delivered to Google. That's a generous figure, sure, but the payouts have been higher -- between 75% and 79% -- in the past.

Holding back will fatten Google's coffers, but it also risks alienating Google's publishers.

Not that Google has to worry about that right now. There isn't anything close to AdSense in monetizing sites that thrive from targeted text ads, largely because Google is the Internet's largest advertiser. Yahoo! (NASDAQ:YHOO) has an AdSense clone, but it hasn't been a factor for years.  

Watch out for Microsoft (NASDAQ:MSFT), though. It has never offered a paid-search syndication platform for small and medium publishers, and now it has the perfect search engine to make such a thing happen. If Microsoft has dreams of replacing "Ads by Google" ad blocks with third-party sites displaying "Ads by Bing," its timing couldn't be better.

This doesn't mean Google investors should be quivering with fears of vulnerability. Google remains the top dog, and paid search is clearly holding up better than the display-advertising strongholds that define Yahoo! and ValueClick (NASDAQ:VCLK). It also has a fat $19.3 billion in cash and short-term investments sitting on its balance sheet, so if it needs to buy itself out of trouble, it will.

Google isn't the speedster it used to be, though. It's not growing as quickly as market leader Baidu (NASDAQ:BIDU) is in China, and what if that 13% plunge in winning keyword prices is more than just a recessionary blip? What if sponsors have learned to bid smarter, or if the ads are just losing their effectiveness at the higher rates of yesteryear?

Google is still the class of online advertising, but it has some homework to do.

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Longtime Fool contributor Rick Munarriz still uses Google a lot in his daily life. He owns no shares in any of the companies in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.