Are Google Shares Cheap at $300?

Anmuth noted that he wasn't downgrading Google's rating even though its near-term outlook is less favorable than the long term, adding that "we also think search -- and therefore Google -- will continue to gain share of overall and online ad dollars in the current environment as marketers look toward measurable, success-based vehicles."

"And like in the third quarter, we believe buy-side numbers are currently well below sell-side consensus estimates, suggesting that at least some of the weaker near-term outlook is already reflected in Google's share price," Anmuth wrote.

In the meantime, Google has changed its behavior in the face of a weakening macro economy. During a conference call with analysts following the company's third-quarter results, Chief Executive Eric Schmidt talked about cost reductions, including a significant slowdown in hiring.

In a recent interview with the New York Times, Schmidt said, "The issue we face with the economic crisis is we don't know as managers how long the crisis goes. So what is a prudent answer? A prudent answer is to watch hiring."

Schmidt added that the company is conducting "fairly detailed expense reviews to make sure we are not wasting money."

Pyykkonen says that Google may have neglected such cost controls in the past, adding that "in good times, you can hide your inefficiencies."

Now, he says, the company is more in tune with what's going on.

"If there's further deterioration, they'll keep expenses in check so it doesn't bleed down the bottom line," he says.