More Videos
- 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
- Apple's Global Retail Invasion
- Intel Settles; AMD Settles the Score
- HP's Shot Across Cisco's Bow
MOST SHARED
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Existing-Home Sales Jump To Highest Level in 2-1/2 Years
- Wave of Debt Payments Facing US Government
- Paul: Audit the Fed
- Start-Up Proves Everything Really Is Better With Bacon
- TV Retailer QVC Joins 'Black Friday' Frenzy
- Buffett's Wealth and Fame Hasn't Helped 'Warren' As a Name
- S&P Stocks Trading at New 52-Week Highs
- Madoff—The Holiday Drink
- China Asks Its Banks to Slow Down
- Rally Could 'Have Some Legs in 2010': Market Strategist
- Investors May Skew Housing Reality
- Buffett's Wealth and Fame Hasn't Helped 'Warren' As a Name
- Are Crazy Retail Deals Good for Business?
- Expect a 'Square Root-Shaped' Recovery: Chief Investor
- Madoff—The Holiday Drink
- HP to Feed on Enterprise Spending Next Year: Tech Analyst
- Busch: Markets Smell a Country Rat
- Schork Oil Outlook: Mission Impossible For The Bears?
- Bear, Lehman Execs Weren't Wiped Out by Crisis: Study
- How Real Estate Investors Skew Housing's Reality
- Treasury Auction of $44 Billion Gets Good Response
- Even Buffett's Huge Fame Can't Help the Name 'Warren'
- Wave of Debt Payments Facing US Government
- US Job Losses to Bottom out Next Quarter: NABE
- Obama Jobs Forum May Be More Political Than Practical
- Maria Blog: Are Crazy Retail Deals Good for Business?
- Suze Orman’s 'A Healthier, Wealthier You'
RSS FEED
Tech Check
Text Size 
Google will release its first quarter earnings on Thursday against a backdrop of renewed negotiations between Yahoo and Microsoft about some sort of deal to create some sort of meaningful competition for the search industry giant. 
The question is, will news of one trump the news of the other?
And while Google still generates better than 97 percent of all its revenue from search advertising, the company is still widely viewed as an industry bellwether, and its news could likely affect other key stocks in the sector, including eBay, Amazon, Yahoo, even Baidu.
To that end, the Street is looking for non-GAAP earnings per share of $4.92 on revenue of $4.08 billion. If the company meets expectations, or even misses them, it would represent the first time Google has ever suffered a sequential decline on the topline. However, the company would still see a revenue pop of between 7 and 8 percent compared to last year's first quarter.
Google has embarked on some pretty significant cost-cutting initiatives, including a few hundred layoffs, reigning in spending on outside contractors, reducing various employee perks, etc. The issue now, as it has been for some time, is how this company plans to generate new revenue, and whether there are any new revenue streams worth discussing?
YouTube has signed some key content deals during the quarter, but even they represent only a paltry return on investment, though many analysts say YouTube finally seems poised to start earning its keep on the Google balance sheet.
Mark Mahaney, the net analyst at Citi, has already released his very useful "cheat sheet," and here's some key takeaways: Paid Click growth should see be somewhere between 10 percent and 14 percent, more than 14 percent would be positive, less than 10 percent would be negative; Google web sites gross revenue should come in between $3.54 billion and $3.74 billion; Network Sites gross revenue should be within the $1.54 billion and $1.69 billion range; North American revenue should see a decline of between 3 percent and 7 percent; capex spending should be between $400 million and $600 million; and headcount should come in unchanged.
Remember that Google only added 99 workers during the fourth quarter '08, and for a company that's been accustomed to hiring thousands of workers in a very short period of time, that was welcome news to investors worried that the company was growing, and spending, too fast.
Fact is, in the current economic climate, expectations surrounding Google are rather muted. JP Morgan expects an EPS miss, projecting $4.76 a share while Wunderlich Securities anticipates a healthy beat of $5.08 a share, with "a less than 20 percent chance of Google disappointing investors," the firm wrote in a report to clients.
Meantime, some outlying issues that might seep into the conference call: Any clarification that Google might be interested in acquiring Twitter; any more information on Google's stock options re-pricing program for more than 15,000 of its workers; and if the company has anything to say about those renewed talks between Microsoft and Yahoo.
One other thing: Google's Android operating system which powers the G1 smart phone from T-Mobile has also been rumored to be in a trial test running new netbooks from Hewlett-Packard. That development is ripe with conflicts for Google. Not only would the news put Google in the most direct competitive stance yet with Microsoft and its Windows operating system, but it also could put Google in direct competitive position with Apple. That would be the second competitive front Google is opening against Apple, with Android already going up against the iPhone. All of this puts Google CEO Eric Schmidt in an increasingly adversarial position with Apple since he sits on the company's board. At some point, and I think soon, Schmidt will have to step down from Apple's board.
To me, it's amazing he's lasted this long.
But I digress: Thursday will be about Google's numbers. This company has to show some good news to justify the big run these shares have enjoyed since they hit $290 on March 9. They were at $378 earlier this week and if this company disappoints, that big popping noise you'll hear will be Google stock. This will be a nail-biter.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes