* Q2 net revenue seen flat from Q1 at $6.54 bln
* Adjusted EPS expected to be at $7.86
* Shares up 11 pct since launch of Google+ product
SAN FRANCISCO, July 13 (Reuters) - Google Inc's profit margins and its newly released social networking service will be in the investor spotlight when the Internet company reports its quarterly results after Thursday's market close.
The world's No. 1 Internet search company has boosted spending and embarked on an acquisition spree in recent months as it battles rivals such as Facebook, Apple Inc , Microsoft Corp and Groupon.
Rising expenses ate into Google's profit margin last quarter, sending the company's shares down 8 percent after it reported results.
"A declining margin scenario is never good for any stock, no matter how cheap it looks," said Sameet Sinha, an analyst with B. Riley & Co.
But he noted that the recent launch of Google's new social networking service, dubbed Google+, may take some of the heat off the company for its spending and make Wall Street more comfortable with Google co-founder Larry Page, who took the CEO reins in April.
"Google plus is gaining some good buzz from what I see," Sinha said. "It speaks to Google's ability to continue to innovate despite its size."
Since Google introduced Google+ in late June, the company's shares have risen roughly 11 percent, closing at $538.26 on Wednesday.
Analysts polled by Thomson Reuters I/B/E/S are looking for net revenue, which excludes fees Google pays to partner websites, of $6.54 billion in the second quarter, up 28 percent year-on-year and flat from the first quarter.
According to StarMine's SmartEstimate, which places more weight on recent forecasts by top-rated analysts, Google should post adjusted earnings per share of $7.76, which is 10 cents beneath analysts' average expectation for EPS of $7.86.
Investors are also hungry for details about an investigation by the U.S. Federal Trade Commission into Google's business practices as well as any commentary about how the European debt crisis is affecting its advertising business. (Reporting by Alexei Oreskovic; Editing by Richard Chang)