Google Earnings Preview

It's crunch time in analyst land, as everyone's gearing up for Google and Yahoo to announce their third-quarter financial results. The New York Times' Miguel Helft talks with RBC Capital Markets expert Ross Sandler, who predicts Google's net revenue will rise to $4.05 billion, up 35 percent from this time last year. Even so, most pundits see search advertising leveling out, and Google's stock still hasn't recovered from the shocks of the last few weeks, hovering around $350 a share.

CNET reports that Cowen analysts Jim Friedland and Kevin Kopelman are lowering their estimates of the company, given the credit crunch and the stronger dollar. "We think the growth of paid-search budgets—and therefore Google's revenues—will be lower than expected, as smaller overall ad budgets will limit the ability of advertisers to meaningfully increase search spend." So down goes Google's stock estimate, despite staggering revenue growth reports.

But hey, things could be worse—you could be Yahoo. The display-ad market, which Yahoo needs for most of its revenue, is actually expected to shrink going into the fourth quarter; in fact, CNET reports analyst Colin Gillis as declaring it "under siege." Yahoo's stock may have bottomed out, and its comScore results for September seem to indicate it may have finally stopped the plunge in its share of the search market.

Still, investors want Yahoo to do something serious to turn around its fortunes, such as buying whatever's left of AOL or nailing the Google deal. That's too bad, since Roll Call that Microsoft is using every chit it's got on Capitol Hill to kill the deal. Oddly, Microsoft is even reportedly hassling the American Corn Growers Association to oppose the deal as well. Could we be seeing some Feeling Lucky-Daily Bread synergy here? reports