As the third quarter winds down, Wall Street is getting a little more positive about Google’s performance. Citi analyst Mark Mahaney raised Q3 estimates this morning, citing positive trends in the search market.
Mahaney now expects Google to report $4.25 billion in net revenue, representing 5% growth from the second quarter, up from his previous estimate of 3% q/q growth. (And above the Street’s $4.20 billion consensus.) And he bumped his EPS estimate up to $5.35 from $5.26 — a penny over the Street’s $5.34 consensus.
- Q3 “is showing clear strength” versus the first half of the year. Specifically, his mid-September checks are “almost universally positive,” with Performics, SearchIgnite, and Covario each anticipating its clients will spend 10% more q/q on search in Q3.
- Modest CPC pickup, led by relative strength from retail, tech, consumer electronics, automotive, education, and entertainment.
- Bing a longer-term — not immediate — threat. “Concrete interest” in Bing by ad buyers, who want a strong rival to Google. But “the key issue… remains volume,” and Bing isn’t going to get much more volume until Yahoo is integrated. That’s not going to happen until 2011.