FORTUNE — Did you hear about Google’s premature announcement? No, not the mid-morning earnings release, hours ahead of schedule, which sent Google shares plummeting 9% before trading had to be halted on the Nasdaq.
On Thursday Google (GOOG) suffered from another untimely leak. As I sat inside Google’s San Francisco office listening to a presentation on the company’s new Chromebook laptop, which was to be publicly unveiled later in the day, I googled “Chromebook” and the first result that came up was the product page for the still secret device. Oops.
The reason I mention the Chromebook announcement is that it may help put Google’s early and disappointing earnings announcement in perspective. Chromebooks, which first began selling a little over a year ago, have hardly been a success. They have limited capabilities, and since they don’t run a full-fledged operating system, but rather a sort of Web browser on steroids, they are meant to be used within range of a Wifi connection.
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But the new Samsung Chromebook, as this device is called, looks a bit like an “ultra-book.” It is elegant, light (2.5 pounds), thin (0.8 inches) and is said to have a long battery life (6.5 hours). It comes with 100GB of free cloud storage on Google Drive and runs 1080p video. Best of all, it is priced at just $249. All that makes it far more attractive than earlier, bulkier models, whose prices started at $349 and up. Sundar Pichai, senior vice president of Chrome at Google, said the pricing would allow families to use them as extra machines to have around the house. Leave one in the kitchen, perhaps, or hand one to the kids. “We really want this to be for everyone in the family,” Pichai said.
There is no guarantee that the new Chromebook, which goes on sale Monday, will be a hit. But it’s bound to look attractive when compared to competing devices running new versions of Microsoft (MSFT) Windows, which will be more expensive. And more to my point, the whole Chromebook initiative — creating a Web-connected computer that requires no software upgrades or management — is emblematic of the kind of long-term technology bet Google is known for. The Chromebook effort began in 2009, when Google first announced the Chrome OS operating system. Now the company is doubling down on that bet, planning a marketing campaign to promote the new machine, which will be available at 500 Best Buys (BBY), and online on Amazon.com (AMZN) and Google’s Play store.
Not all of Google’s long-term bets have been successful. But what matters is that those that have – YouTube, Maps, the Chrome browser and Android, for example — have more than compensated for the duds, and they have kept Google at the forefront of the tech industry for years.
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Of course, all that would turn into window dressing if Google’s ability to make money starts to sputter. And that brings me back to the disappointing earnings report. Sales missed analysts’ projections. (Google has a practice of not providing its own forecasts.) Profit was down. Investors were especially rattled by the fact that the price that advertisers pay for every click dropped 15%, compared to a year earlier. That heightened persistent fears among investors that search on mobile devices may not be as profitable as on PCs.
On Tuesday, at Google’s Zeitgeist conference in Arizona, I had the opportunity to ask Page precisely that question. Here’s are the salient points of he made. (You can watch the full question and answer here.)
“There is so much opportunity based on always having a computer with you knowing where it is,” Page said. “I think monetization is going to go up. Opportunities are going to go up, products are going to work better for people. I think Google is pretty good at understanding that, so I think that’s a benefit to us, not a hindrance.” He added: “There will be some disruption as people go through those changes. But a lot of the things we do work great on a smartphone.” (Page gave similar answers on Thursday during a call with financial analysts.)
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The weaker-than-expected financial report suggests that we are in the midst of Page’s “disruption” phase. But there is reason to believe Page is right about Google’s long-term prospects. And even now, things are not exactly dire. For one, Google said that mobile revenue is coming in at a rate of $8 billion a year, and that the “vast majority” of that is from ads. Compare that to the $2.5 billion in mobile ad revenue a year ago, and you could conclude that the transition to mobile is going fairly well for Google. What’s more, if you discount the negative impact from weakening currencies overseas, Google’s overall revenue would have been significantly higher.
“The top-line fundamentals for Google’s core business are solid,” Ben Schachter, an analyst with Macquarie Securities, wrote in a note to investors following the earnings report. Noting that Google’s revenue, excluding Motorola which was not part of the company a year, was up 23.7%, Schachter added: “This is the proper measure of the core business and it is fine.”
And consider this: Even after the shocking $60 drop Thursday, Google’s share price is up about 20% over the past three months, better than Amazon (up 13%), Apple (AAPL) (up 4%), Microsoft (down 3%) or Facebook (FB) (down 35%). (If you go back a year, Apple’s stock significantly outperformed Google’s.)
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After listening to the earnings call, one more thing struck me. As the year opened, the threat to Google appeared to come largely from Facebook and social. So it’s no surprise that Google+ received 18 mentions in the earnings call for the first quarter, and 26 mentions in the following quarter. This time? Just two mentions. In Silicon Valley, things change very fast indeed.