More Videos
- 3D's Tipping Point and Your Living Room
- Silicon Valley and Hollywood Now Fast Friends
- HP Comes in As Expected; Is It Time to Buy?
- Apple Comes to AT&T's Rescue
- My Top 10 Tech Toys for the Holidays
- iPhone a Better Gaming Platform Than Android?
- Dell Has Some Explaining to Do
- Dell May Start to Show Some Promise
- Has Twitter's Finest Hours (Seconds) Come and Gone?
- Intel's Andy Bryant Offers An Explanation
MOST SHARED
- Tiger Woods Out of Hospital After Accident
- The Good Entrepreneur Winner
- Get Paid Six Figures to Wear a T-Shirt?
- Dubai Spooks Investors But May Bring Buying Opportunity
- Global Selloff From Dubai Woes Shows Signs of Winding Down
- Longer Lines, Fuller Carts This Black Friday
- Halftime Report: Dubai - First Ripple Of Larger Crisis?
- 8 Retailers that Gain During the Holidays
- U.S. Stocks Fall on Dubai Worries
- Black Friday at Best Buy
- Strategists on Dubai: Avoid 'Rash Moves' Now
- Longer Lines, Fuller Carts This Black Friday
- Dubai Stock Market Fear Has 'Legs': Dennis Gartman
- Obama's Emission Reduction Pledge Paints Future for Autos
- Is Super Bowl Halftime Act Too Old?
- Surprising Options Trades in TiVo Shares
- EA Sports Hopes to Pump Up Sales Through Pop-Up Locations
- Global Selloff From Dubai Shows Signs of Winding Down
- Dubai Stock Selloff May Bring Buying Opportunity
- Longer Lines, Fuller Carts This Black Friday
- Tiger Woods Out of Hospital After Accident
- Dubai Fallout Is a Correction, Not Another Crisis: El-Erian
- Dubai's Debt Woes Signal New Era for Creditors
- Get Paid Six Figures to Wear a T-Shirt?
- The World's Biggest Debtor Nations
- Five Tips for Buying a Foreclosed Home
RSS FEED
Tech Check
Text Size 
 |
AP |
] in the books surprisingly early, we can now turn our attention to Google [GOOG
Loading...
()
] , reporting after the bell later today. And while there's no question Google's business is slowing, the Microsoft news proves that Google is really the only online advertising game in town. The Street's looking for $4.96 in earnings in per share on $4.12 billion in revenue. Most analysts I'm talking to expect an inline quarter, and just like in quarters past, they'll be forced to read the tea leaves when it comes to guidance since Google doesn't peddle in such trivials.
But that won't stop the Street from pouring over several key metrics that will help tell the health and welfare of this company. The non-GAAP operating margin should come in somewhere around 49.1 percent. Anything above, say, 50 percent would be looked at very positively. Mark Mahaney at Citigroup continues as a Google bull with a $450 target and reiterated his "buy" on these shares just a couple of days ago.
His helpful cheat sheet offers a nice range road map for investors studying the company's P&L when it's released tonight. He anticipates a 17 percent increase in paid click growth, but 13 percent to 17 percent would be acceptable, and anything below 13 percent could pose problems. Google's Web Site gross revenue should be right near $3.7 billion; network sites' gross revenue should exceed $1.7 billion and something less than $1.68 billion would be viewed negatively; North American revenue should be up 10 percent, and something less than 5 percent would pose problems; Mahaney says Google's capex spending should be $627 million, though anything less than $450 million would be a good sign. Also, keep track of the hiring line. Google's been trying to rein in expenses, recently laying off 100 recruiters, so the addition of 500 employees in the fourth quarter is expected. Fewer, Mahaney says, would be good. More, not so much.
All of that aside, with the precipitous drop in Google shares, the question will invariably arise as to whether its brightest days are behind it and whether investors can still consider the company a "growth stock."
The answer has to be "yes," and an easy "yes" at that.
Look, Google's profit growth has slowed significantly, partly because of the market conditions it faces and partly because of the law of large numbers. But let's not forget, for all intents and purposes, Google is still the only game in town when it comes to Search and online advertising. In its report this morning, Microsoft disclosed that its online services unit did $866 million in revenue, flat to the prior quarter, and well below the $930 million or more that some on the Street expected. Even if the company did hit its online number, it's a pittance compared to what Google, and even Yahoo [YHOO
Loading...
()
] does. And if its only saving grace is some kind of deal with struggling Yahoo and also-ran AOL [TWX
Loading...
()
] , Google's better off than you might think.
Even if Microsoft and Yahoo and AOL stop their fumbling and come up with a deal, the ideas being bandied about are so complicated that meaningful integration could still be a year away, and that's if they announce a deal today. Over that time, Google will continue to tighten its already vein-busting stranglehold on online advertising. Google continues to gain market share. And at some point, this economy will turn, and advertisers will come back, and they'll realize the unique value-proposition Google offers. This year indeed might be a wash. But longer term, Google seems like a great play. And that doesn't even take into account whether this company actually comes up with another revenue stream, which has been elusive so far.
Even without it, though, Google's looking good for those squinting investors trying to get a glimpse at what's looming just over the horizon.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes