Goolge Business Model

Still, Google continues to chug along in its vast search advertising business and make headway in newer businesses like display advertising. Its core business, not including Motorola, had net revenue of $8.36 billion, less than the $8.41 billion that analysts had expected but up 21 percent over last year. Google did not break out net income for the two businesses, but for the combined company it climbed 11 percent. Google shares were up 2 percent in after-hours trading.

Google's blossoming mobile strategy makes it even harder to differentiate among the big technology companies. Google, Apple, Microsoft and Amazon each have mobile devices, apps and cloud storage. And it is in those areas that the tech giants are competing.

In June, Google introduced the Nexus 7, a sleek seven-inch tablet to compete with the iPad, the Kindle and the Surface. It also showed the Nexus Q, for home entertainment; Internet-connected Google Glasses; and a new version of its Android mobile operating system, Jelly Bean.

The idea is to offer mobile devices so more people use Google services everywhere they go, instead of devices and services from competitors.

"All of the combatants in the intergalactic race for supremacy appear to be launching consumer products and hardware," said Jordan Rohan, an Internet analyst at Stifel Nicolaus. "Google's management team realizes that if consumers lock into the Apple ecosystem, it's going to be hard to sell them Android devices in the future."

But while Google is meeting people on the devices they want to use, analysts are closely watching whether it can make as much money on mobile devices as it has on desktop computers.

People have long described the price difference between print and Web ads as moving from analog dollars to digital dimes. Cellphone ads could be described as trading those dimes for mobile pennies. Clicks on mobile ads cost about 40 percent of the price of desktop ads, according to Stifel Nicolaus. That is because...