Google (NASDAQ: GOOG) isn't invincible. The search and online ad giant is expected to report lukewarm growth for the second quarter today because of a brutal market for advertising and redoubled efforts by Microsoft (NASDAQ: MSFT) to own a bit more than its meager share of the online market.
Good news would have to come in the form of a better mousetrap for growing Google's ad market and ways to keep the Redmond machine from tripping it up. Ultimately, analysts are looking to see how Google can get back to the double-digit growth that used to be a given.
Google's Q2 financial results will show how well the company has weathered a major test of its dominance. Essentially, it is good at accessing existing demand -- and keeping its competitors from doing so -- but it can't create the need for (and consumption of) its projects. So, in a harsh market, Google is looking for untapped demand as its key to growth.
Microsoft also remains a concern. With its launch of the search engine Bing, the company executed a $100 million marketing campaign, which has had an impact on its share of the search engine market. Data from comScore shows a search market share increase from 8% in May to 8.4% in June. Microsoft stole this sliver of the market from Yahoo Inc (NASDAQ: YHOO), which saw its share of the search market fall from 20.1% to 19.6%. Google has 65% of the market (no change).Analysts are calling Google's Q2 revenue at $5.49 billion, up around 2.3% from $5.37 billion during the second quarter of 2008. They are also forecasting EPS of $5.08 (with exclusions), up from $4.63 for the same period last year.
Even if Google does turn in a (relatively) bad quarter, it will likely be the company's low point in the global recession. And, compared to the suffering of other companies, Google's bottom won't be so bad.
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