Investors appear ready to embrace Google Inc. again after weeks of hand wringing over whether the faltering U.S. economy would bog down the Internet search leader's moneymaking machine.

Google won back Wall Street with first-quarter earnings and revenue growth that surpassed analysts' predictions, propelled by an aggressive push outside the United States.

The pleasant surprise delivered late Thursday lifted Google's recently sagging shares by $76.42, or 17 percent, in after-hours trading. If the stock surges to a similar gain during Friday's regular session, it will be the largest one-day increase in Google's shares since the Mountain View-based company went public in August 2004.

"This is mostly a relief rally," Stanford Group analyst Clayton Moran said. "People are relieved that things aren't as bad as they thought."

The stock still has a long way to go to fully recover the $75 billion in shareholder wealth that evaporated as economic worries caused Google's market value to plunge by 35 percent since December. That left the company's shares at $449.54 at the end of Thursday's regular trading.

Google's performance indicates the Internet's advertising market _ expected to generate $44 billion in worldwide spending this year _ remains robust, especially outside the United States. Powered by its popular search engine, Google has built the Internet's most lucrative ad network.

Despite Google's reassuring first quarter, some analysts and investors remain cautious because so much of the company's ad revenue comes from small and midsize businesses more apt to curb their spending if the economy's woes worsen.

"The fact Google hasn't seen a slowdown yet just means that there might be another shoe to drop," said Darren Chervitz, co-manager and research director for the Jacob Internet Fund, which has sold about half of its Google holdings in recent months.

Google's aura of invincibility remains intact for now, much to the delight of its chairman and chief executive.

"It's clear we are well positioned for 2008 and beyond, regardless of the business environment we are surrounded by," Chairman Eric Schmidt said.

Schmidt and other Google executives expressed confidence that the company's ability to divine consumer interests from their online search requests to deliver relevant ads will hold its appeal even if the U.S. economy sinks into a recession.

The company also expects to boost its profits by offering more dynamic advertising through its recently completed $3.2 billion acquisition of online marketing service DoubleClick Inc., as well as YouTube.com, the video-sharing site that Google bought for $1.76 billion in 2006.

In an apparent attempt to hold down its expenses, Google also is hiring employees at a slower pace.

Excluding the 1,500 workers picked up in the DoubleClick deal, Google added about 850 employees in the first quarter, a nearly 50 percent decrease from the same time last year. What's more, Google confirmed it's jettisoning about 300 DoubleClick jobs in the company's first major payroll purge.

Google earned $1.31 billion, or $4.12 per share, during the first three months of the year. That represented a 30 percent increase from net income of $1 billion, or $3.18 per share, in the first quarter of 2007.

If not for expenses to cover stock given its employees, Google said it would have made $4.84 per share.

That figure outstripped the average projection of $4.52 per share among analysts surveyed by Thomson Financial.

It marked the 12th quarter out of the 15 since Google went public that its performance has topped analyst expectations _ a trend that had helped propel its stock to nearly $750 before the recent plunge.

First-quarter revenue totaled $5.19 billion, up 42 percent from $3.66 billion a year ago. More than half of the revenue came from outside the United States _ a first for the 9 1/2-year-old company.

Google's first-quarter showing could foreshadow a strong earnings report from Yahoo Inc. next week.

If it can meet or exceed analyst expectations like Google did, Yahoo will be in a better position to ward off Microsoft Corp.'s unsolicited takeover bid or at least argue for its suitor to raise the cash-and-stock offer from its current value of about $42 billion.

Google is trying to help Sunnyvale-based Yahoo thwart Microsoft by helping Yahoo place ads on its Web site as part of a test scheduled to conclude next week. Schmidt declined to answer a question about the chances of Google signing a long-term advertising contract with Yahoo _ a deal that would likely face intense scrutiny from antitrust regulators.

"It's nice to be working with Yahoo," Schmidt said. "We like them very much."

Investors had serious doubts about Google's short-term prospects before Thursday.

The financial targets that guide Wall Street's expectations had fallen during the past two months as Web surfing data convinced analysts that Google's advertising links aren't attracting as much consumer interest amid mounting evidence the U.S. economy had tumbled into a recession. Google makes money from the links only when Web surfers click on them.

But management has said the slowdown in ad clicking largely reflected changes that purposefully reduced the volume of commercial links in an effort to deliver more compelling messages that lead to purchases.

By making this switch, Google bet that advertisers would be willing to pay more for each ad link and ultimately generate more revenue from fewer clicks _ an approach that appeared to start paying off in the first quarter.