Their Q1 market share is up to 50% (6% better than last year). Q1 Internet ad sales increased 38% from last year to $3.9Bn.
The Q2 estimate for Google is $2.19, even though last quarter they earned $2.29 on 6% less industry revenue at 2% less market share.
Internet ad sales do not count Google's vast small business revenues through AdWords. It is possible that Schmidt will clear some of this up at today's investor conference and, for that reason alone it's a buy.
Eric, Sergey and Larry all get paid in stock, so I'm sure they (and their investors) would like to see an improvement - the question is are you more or less motivated when every dollar in stock price means $10 million to your personal wealth?
So while it is well known to my readers that I am no fan of the company (more accurately the way it is run, as I quite like the concept in general) I still see a possible buy in the making at this level.
The stock is stuck in a channel between the 50 dma at $393ish and the 200 dma at $372ish (hard to be exact on this one), so we really just have to wait for the breakout in either direction. Meanwhile, I will amuse myself with the $410 call options at $2.60, looking to get out at $5 or if the stock drops below $370. If it runs back up to $390 I will buy the $350 puts for $2.50 (rough guess) and look for $5, stopping out above $393. This should be a fairly low risk way to play the channel and any $20+ spike in either direction will make me very happy.
There is a theory being bandied about that Google is overpaying Dell (DELL) for desktop space, but even if they are paying $1Bn, they have locked up 20% of all the world's computer screens which I would think is a pretty good deal in an environment where web advertising is increasing 38% a year (still less than 1% of the global ad market).
Today will be a good test day for Google, especially if the indexes sink some more as they have often bucked the trends in the past. This stock has lost 20% in the past 5 weeks while Yahoo (YHOO) has been flat and the Nasdaq has lost less than 10%: