Three Reasons Why Google Inc (GOOG) Will Shine Tomorrow

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Google Inc (NASDAQ:GOOG) is gearing up to report quarterly results tomorrow afternoon, and it’s easy to be worried.

The stock hit a new all-time high this week, fueling expectations that may be hard to live up to tomorrow. Smaller rival Yahoo! Inc. (NASDAQ:YHOO) posted disappointing growth metrics yesterday. Analysts also see Google Inc (NASDAQ:GOOG) growing its earnings per share by less than 7%, possibly questioning if Google is really worth 20 times this year’s projected profitability.

Well, don’t fret. Let’s go over a few reasons why Big G may come out of this just fine.

1. Yahoo! isn’t Google
Yahoo! Inc. (NASDAQ:YHOO) may have set a dreary tone for online advertising yesterday afternoon by posting an 11% slide in display advertising revenue. However, Yahoo! has been marching to its own beat for years, and thankfully for Google Inc (NASDAQ:GOOG) it’s not the same as what the online advertising leader is playing.

Yahoo! Inc. (NASDAQ:YHOO) also posted an 8% decline in cost-per-click — excluding Korea — but made it up in volume with a 21% spike in the number of clicks. Now that is a trend that we’ve seen at Google Inc (NASDAQ:GOOG) in recent quarters, but this is really a more damaging indicator for Microsoft Corporation (NASDAQ:MSFT) than it is for Google. Microsoft’s Bing is the one powering Yahoo!’s paid search, and it naturally doesn’t have the pricing power and breadth that Google commands globally. Since Microsoft takes a 12% cut of Yahoo!’s action here, that is the company that may be following Yahoo!’s lead when it reports tomorrow.

(Yes, Google and Microsoft Corporation (NASDAQ:MSFT) both report tomorrow.)

2. Google beats more often than not
For a company that doesn’t provide guidance, Google Inc (NASDAQ:GOOG) has historically found a way to land ahead of Wall Street forecasts.

It’s not perfect, but Google has posted better-than-expected earnings in three of the past four quarters. In a welcome trend, its biggest beat came just three months ago when it landed 9% ahead of the analyst average.

So, sure, analysts are only targeting net income per share to climb by a mere 7% tomorrow — but the smart money has to be betting on something slightly better.

3. Don’t underestimate the innovator that Big G has become
A lot of people see Google Inc (NASDAQ:GOOG) as the top dog in search and online advertising, but the dot-com darling is more than just that. Let’s not even talk about Android, where Google’s mobile platform is the world’s mobile operating system of choice for smartphones (and to a lesser extent, tablets).

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