If you look deeper, though, the biggest difference is actually in "other income" which itself was primarily driven by gain/loss in securities. In other words, the entire difference in net income this quarter is really a result of the markets tanking over the past few months. Google's operations are as profitable as ever.

Google's net income is up 35% if you ignore the equity numbers. Not only is Google as profitable as ever, it's quite a bit more profitable than it has been. I fully expect GOOG to open up tomorrow, maybe even climb higher than today's open.

That doesn't sound right. The operating income grew from 16.4B to 20.1B. That's 21%, not 35%?

I'm counting net income less gains from equities. $13 billion last year to $17.5 here. You're right though, probably should've just looked at change in operating income which is still a strong 21%.