Just in case you were in danger of forgetting, Google’s (GOOG) second-quarter earnings report last Thursday should remind you: It’s good to be out in front of the market, but as an investor you don’t want to be too far out in front.

I can pick a ton of holes in Google’s competitive position, and point out the challenges it faces over the next couple of years. But the market right now doesn’t want to hear about anything so far off.

The news that counts is that Google is producing great numbers from its current dominance of the Internet search space:

  • For the second quarter, Google reported earnings of $8.74 a share (excluding one-time items). That was 91 cents a share above the Wall Street consensus estimate of $7.83.
  • Net revenue (for Google you have to subtract the cost of acquiring traffic from the revenue the traffic brings in) climbed 26% from the second quarter of 2010, to $9.03 billion. Wall Street was looking for $8.63 billion.
  • Operating income grew to $3.32 billion for the quarter, from $2.67 billion in the second quarter of 2010.

Analysts who dinged the company last quarter for rising costs were relatively quiet on that front this time around, even though operating expenses climbed 49% from last year. Operating expenses increased to 33% of revenue, from 29% of revenue in the second quarter of 2010.

And recent criticism that the company was throwing too much cash at too many ideas was also muted. The focus was on things that are working—the Android operating system and the Chrome browser—and not on things, like the company’s effort to develop a driverless car, that have drawn attention in recent quarters as signs that the company lacks discipline.

But that’s what happens when a company reports earnings that kill on analysts’ favorite metrics. The company’s 32% gain in quarterly revenue was a faster growth rate than the global search market as a whole.

Given that Google’s market share for search held steady this quarter, the increase in revenue was a sign that Google was converting more of its traffic into dollars. For core search and YouTube, paid clicks grew by 18% from the second quarter of 2010.

That’s an impressive number to analysts who have been fretting at the valuations of Internet companies like LinkedIn (LNKD), and wondering if these companies could turn traffic into revenue.

All that said, from a longer-term perspective this wasn’t the greatest quarter for Google. The company lost a bidding war against the Rockstar Bidco consortium to buy 6,000 patents that once belonged to Nortel Networks.

This follows Google’s loss of another patent auction last year, for 882 patents owned by Novell. The winning consortium in each case included Apple (AAPL) and Microsoft (MSFT).

The losses point to a troubling weakness at Google: the company owns just 600 patents in the United States, compared to Apple’s 4,000 and Microsoft’s 17,000. That wouldn’t be a big deal, except that a number of critical Android phone makers have lost recent patent battles, either to Microsoft or Apple.

Take the case of HTC, the Android phone maker. Microsoft signed a licensing agreement with HTC last year, and now collects $5 for every Android phone HTC sells. Microsoft has sold licenses to four other Android phone makers in the last month or so.

The long-term worry for Google—and Google investors—is that this imbalance in patents will work to disadvantage Android and boost Microsoft and Apple phone software and hardware. Not now, but somewhere down the road. I’d say it certainly bears watching.

But it’s not a big enough worry now for you not to enjoy Wall Street’s love affair with Google’s revenue and earnings growth.

In the hours after Google reported results on July 14 and before the market opened for trading the next day, just about every analyst on Wall Street upped his or her earnings estimate for 2011. Briefing.com calculates a total increase of 3.5% in 2011 estimates by the time trading opened on July 15.

So worry all you want about Google’s fight with Apple and Microsoft in the quarters and years to come. But enjoy Wall Street’s focus on the earnings here and now.

The stock inched just above $600 before the close on Tuesday. With Wall Street analysts calling for target prices of $725 to $830, I doubt that Wall Street will rethink its enthusiasm for Google’s earnings growth until we see the $700 mark.

Full disclosure: I don’t own shares of Google, Apple, or Microsoft in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund (JUBAX), may or may not now own positions in any stock mentioned in this column. The fund did own shares of Apple and Google as of the end of March. For a full list of the stocks in the fund as of the end of March, see the fund’s portfolio here.