expect Google to post revenue a tad above the Street consensus estimate, and earnings that are basically within the consensus estimate. At the same time, they are reaffirming their overweight rating for Google stock ahead of its first-quarter earnings call.
Piper Jaffray analyst Gene Munster noted that he's seen a considerable improvement in online ad markets and anticipates that Google will benefit from that in the first quarter. "The final piece to our Q1 checks came last night in third-party paid click data, which we viewed positively," Munster wrote in a research report published April 13.
Thus, Piper Jaffray analysts are raising their outlook on Google's ad segment a tad, while lowering expectations of Google's smart phone Nexus One, leading to no effective difference in their first-quarter predictions of 3% quarter-on-quarter revenue growth.
For the first quarter, Goldman Sachs analysts also have a positive assessment of Google's revenue status, in light of its easy comps. "We believe Google can sustain mid-teens revenue growth post easy comps given contributions from display advertising and Nexus One sales," Goldman Sachs analyst James Mitchell noted.
Google's paid lead growth has disappointed Mitchell, but "Google can manage this metric through quality initiatives, and paid lead comps get easier," he noted.
One question that has undoubtedly been plaguing the minds of investors ahead of Google's quarterly earnings call is how the company's decision to pull out of China and its massive Internet market -- and to redirect web traffic to freer Hong Kong because of censorship disputes -- will affect its future prospects. Well,
, for one, is offering some hope that what many consider a huge mistake on Google's part isn't irreversible.
"While Google may be shutting down its local search engine, the company indicated that it expects to maintain R&D and sales operations in China to support other initiatives ... we think maintaining this presence could make it easier for Google to reenter the market in the future if political or economic conditions change," Morningstar analyst Larry Witt wrote in a report. Witt noted that he doesn't expect Google or the Chinese government to concede to one another regarding their differing views on censorship any time in the near future.
-- Reported by Andrea Tse in New York
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