Google's Day of Reckoning

Google (GOOG) will release its first-quarter numbers on Thursday, and the investing world will find out if the company can shrug off the recession or will face the same hammer as the rest of Wall Street. Analysts predict that Google will announce a drop in its quarterly revenue for the first time in the company's history, although they haven't exactly reached consensus on a figure. Forbes and Reuters have it pegged at a 3 percent drop from the fourth quarter of last year, which is still a considerable improvement over the same quarter a year ago. Moreover, Google stands head and shoulders over its rivals. According to the Ecommerce Journal, Yahoo's revenue is expected to drop 16 percent from the same period last year, while AOL's revenue will plunge by at least 19 percent.

Overall, analysts are confident that Google's layoffs and other cost-cutting measures will result in higher net income numbers, with some arguing that the company's new frugality predates the meltdown last fall. This may well be the worst quarter in the recession for advertising revenue, as consumers hibernate after the big holiday buying spree but haven't yet geared up for summer. If Google's numbers hold here, the company just might be recession-proof after all.

Still, Forbes writer Quentin Hardy wants to go over Google's performance a little more closely. Investors are still spooked by the idea that Google has only one real revenue stream: search advertising. YouTube, the Doubleclick display ad service, Gmail, Android, and Google Docs all have yet to perform up to Google's standards, and some products such as YouTube may actually lose money. In addition, the cloud-based Gmail and Google Docs represent the future of the company, as Eric Schmidt pushes his cloud-computing dream. Thursday's conference call will reveal just how far along that dream is.

Finally, Reuters has an interesting factoid. How mush cash does Google have lying around? Try almost $16 billion. No wonder Sergey Brin wants to shoot himself into space ...