A 30% rise in operating costs has hit Google's third quarter profits, sending shares 3% lower in extended trading.
The Internet search leader earned $2.81bn (£1.75bn) for the three months ending in September compared to income of $2.97bn in the same period last year - a fall of 5%.
The slip was blamed on the addition of nearly 3,000 employees and wider investment - a strategy that has concerned investors.
The results fell below analyst estimates and the share price decline was on top of a 4% fall over the year so far.
Analysts argue that Google could be making more money if not for CEO Larry Page's belief that some short-term gains should be sacrificed so that the company can invest in projects and other research that could take years to pay off.
Page refers to these sometimes risky initiatives as "moon shots".
He defends them by pointing out that Google might not have ever developed its market-leading Android mobile software and Chrome Web browser if the company had not taken such risks.
Some of the innovations Google is still trying to fine tune include connected eye-wear such as Google Glass, internet-beaming balloons, a fleet of drones, driverless cars and robots.
Google's operating expenses surged 30% from a year earlier to $5bn in the third quarter.
The pace of rising expenses outstripped the 20% gain in Google's third-quarter revenue to $16.5bn (£10.3bn).
A big chunk of the higher expenses went toward bringing in the extra staff.
In a positive sign, Google's average ad prices in the third quarter dipped by just 2% from last year - the smallest decrease during what is now a three-year slump in the prices paid to Google for ads appearing alongside search results and other Web content.
The measure, known as "cost-per-click", has sagged because of the growing popularity of smartphones over laptops and desktop PCs which have better screens to see marketing.
Google has been able to offset the lower ad prices by inducing people to click on marketing links more frequently.
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