The Long and Short Into Google's Call

Once every three months, we're treated to a Google (GOOG - commentary - Cramer's Take) earnings call. I say "treated" because the company is, by many metrics, the fastest-growing company in history, and we're participating in something historic every time we listen to a Google earnings call.

The stock is very volatile today, and the near-term action will get even more interesting after the company reports tonight, but it is important to have a longer-term angle on Google. But enough perspective, let's talk trade.

I expect that Google's going to report some very strong numbers tonight, probably topping analyst expectations of $1.76 in EPS on $1.3 billion in revenue by just a bit.

For the record, the company has topped analyst estimates in each of the last four quarters by 20%, 40%, 12%, and 11%, respectively. That declining trend in the magnitude of the company's "beats" tells you that the sell-siders have been getting better at modeling this company.

Google does a lot of things completely against tradition, including how it deals with Wall Street, and because Google gives the analysts little guidance and little help in their models, the possibility of a major beat or, for that matter, a major miss, remains very high.

In other words, nobody really has any idea what this report tonight will look like, which makes this $120 billion market-cap stock rather unique among the major big tech stocks. This sure ain't Intel (INTC - commentary - Cramer's Take), where everyone knows what the quarter will essentially look like even before the report.

Obviously, such a setup means there's a lot of risk heading into tonight's conference call for both bulls and bears. After Yahoo!'s (YHOO - commentary - Cramer's Take) less-than-pretty report last week, Google's been trading all over the map, and mostly to the downside.

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At the time of publication, the firm in which Willard is a partner was net long Google and Yahoo!, although positions can change at any time and without notice.

Cody Willard is a partner in a buy-side firm and a contributor to TheStreet.com's RealMoney. He also produces a premium product for TheStreet.com called The Telecom Connection and is the founder of Teleconomics.com. The firm in which Willard is a partner may, from time to time, have long or short positions in, or buy or sell the securities, or derivatives thereof, of companies mentioned in his columns.None of the information in this column constitutes, or is intended to constitute, a recommendation by Willard of any particular security or trading strategy or a determination by Willard that any security or trading strategy is suitable for any specific person. Willard appreciates your feedback -- click here to send him an email.