Dr. Eric Schmidt, Google’s chief executive

Google on Thursday published its second quarter financial results and signalled the online advertising market appears to be stabilizing. However, while net income rose 18% in the second quarter, revenues only grew 3% the lowest growth rate in the company’s history.

“A quarter ago, we had no idea where the bottom was,”Eric Schmidt, Google’s chief executive, said during a conference call with investors.“We are at the moment not looking at that downward spiral that we thought we might see six months ago.”

Schmidt said Google’s business appeared to have stabilized and advertisers in areas like retail and travel were “coming back.” He singled out finance as a sector that was still depressed.

For the first time, Google said growth in advertising on YouTube showed that the online video-sharing site was on track to become a profitable.

Revenues were $5.52 billion and net income grew to $1.48 billion from a year earlier with a benefit from cost cutting.

Google has cut 300 employees over the past year.

Worldwide, Google employed 19,786 full-time employees as of June 30, 2009 and had $19.3 billion in cash, cash equivalents, and short-term marketable securities.

Revenues from outside of the United States totaled $2.91 billion, representing 53% of total revenues in the second quarter of 2009, compared to 52% in the first quarter of 2009 and second quarter of 2008.

Revenues from the United Kingdom totaled $715 million, representing 13% of revenues in the second quarter of 2009, compared to 14% in the second quarter of 2008.

Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 15% over the second quarter of 2008 and decreased approximately 2% over the first quarter of 2009.