Google Second-Quarter Earnings Coming Up

I’ll have a quick take on Google’s second quarter earnings as soon as they’re released shortly after 1 p.m. Pacific time. I’ll add key comments from the conference call and post an early draft of a full story a couple of hours later. Several blogs, such as Between the Lines and Silicon Alley Insider, will be provided details too.

For now, some background: Analysts expect 42% growth in net revenue, before payments to marketing partners, to $3.87 billion, and $4.74 in earnings. That would be up from earnings excluding special items of $3.56 a share on sales of $2.7 billion a year ago.

Google’s results will be closely watched for any signals of slowing growth in online ad sales, which so far has largely escaped the economic doldrums. Google executives have said online advertising could be affected by the poor economy, but so far they have not reported any impact. In the first quarter, the company exceeded expectations despite analyst worries based on market research reports that appeared to indicate fewer people clicking on search ads.

Some firms are starting to see, or at least anticipate, some slowdown in online advertising. Earlier in the day, ValueClick reduced its sales and earnings estimates, saying “the macroeconomic environment negatively impacted revenue in the quarter, primarily in the U.S. comparison shopping and U.S. display advertising businesses.” ValueClick, whose business is based on generating leads to potential customers, has had challenges in recent quarters, so it’s unclear whether its troubles indicate an industrywide problem. Yahoo will report its second-quarter earnings on July 22.

However, Google may be in something of a class by itself, thanks to its dominance of the most lucrative part of the online advertising business—one whose measurability may appeal to cash-strapped advertisers more than brand-oriented display ads. Its share of search queries rose to 69% last month, at the expense of Yahoo and Microsoft, according to market researcher Hitwise. Even more important, Google’s share of search ad dollars in the second quarter rose to more than 77%, according to search marketing firm Efficient Frontier. Google’s growth has slowed as sales have rocketed from $3.2 billion three years ago to $16.6 billion last year, but topline growth is still the envy of almost any company its size.

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