There's some truth to that, but their profits are growing because their annual revenues are consistently and exponentially growing, not because their costs are going down:
https://www.google.com/finance?q=NASDAQ%3AGOOG&fstype=ii...
Digital advertising just happens to be a very good industry to be in right now.
The term you are looking for is efficiency which is the measure of how much of the business is dedicated to the parts that provide the revenue versus the parts that don't :-).
I left Google a couple of years after Patrick Pichette joined. Patrick is a great guy and very focused on putting as much money as possible into the bank account (great for share holders, not so great for lifestyle benefits).
But the point is that there is a target return on capital that every group is being held to and those that don't make the cut are being tossed. That helps the overall number get better (assuming those freed up resources either join more profitable projects or leave)
Goes hand in hand with "shutting down a lot of services" since rounded to the nearest billion dollars the only business Google has is search & display advertising, generally deleting anything else accretes positively to the bottom line :-)