Play the Google Earnings Sweepstakes!*


We used to play this game over at Internet Outsider, and everyone loved it, so we’ll give it a go here as well.  Google is reporting earnings this evening, and just about every analyst on the planet is breathlessly predicting more monster numbers.  Such hype often sets companies up to fail (see eBay’s plummet this morning), but as Google likes to say, Google is a “different kind of company.”  So it’s time to step up and place your bets.

Here’s how the Google Earnings Sweepstakes work.  You give us your best estimate of three key numbers (submit in the comments), then we shower glory upon the player who is most right.  The game rewards not only predictive skill–revenue and profit performance–but trading acumen: Your ability to assess what other traders will think of those results.

There’s also a collective experiment going on here as well.  In the past, our collective “estimate” (wisdom of the crowd) has dusted the consensus of Wall Street analysts–who love to jawbone about “upside” without actually raising their numbers (thus ensuring that they can still take a victory lap if the quarter is merely in line).  We’ll keep track of the estimates, and at the end of the afternoon, just after the close, we’ll publish the collective numbers.  So sharpen those spreadsheets and help us beat the Street!

Please submit the following numbers (and, for extra credit, your logic):

1.   Net Revenue
(Gross Revenue less Traffic Acquisition Costs).
2.   EPS
3.   The stock price at which Google will open tomorrow morning.

To help you, here’s a handy spreadsheet with the last 6-8 quarters of info.  And here are the analysts’ consensus numbers:

1.   Net Revenue:    $2.94 Billion (with a range of $2.8 to $3.7). 
2.   EPS:                $3.78  (range of $3.55 to $4.04)
3.   Stock Open:      Here’s where you can really put them to shame…

And here are some other things to consider.  Even mediocre Yahoo had a solid quarter.  CSFB analyst Heath Terry is wildly bullish.  RBC analyst Jordan Rohan thinks Google didn’t pull a revenue lever that it could have–and that this indicates that the quarter will be rock solid.  Google slowed hiring in the quarter, which means either that revenue was coming in behind plan…or that margins will improve considerably.  Last quarter, Google “overspent” and the stock tanked.  CFO George Reyes suddenly announced his retirement.  Google is immune/not immune to the mortgage crisis.  The plummeting dollar will help boost revenue.  And so on.

We’ll post an earnings model here within an hour or so, which should help you place your estimates in context.  But don’t waste a minute!  Step right up and place your bets (entries close at 4pm).  May the best analyst win!

*For fun, here are our own estimates (assumptions in the spreadsheet):

1.   Net Revenue:    $3.01 Billion (with a range of $2.8 to $3.7). 
2.   EPS:                $4.08  (range of $3.55 to $4.04)
3.   Stock Open:    $600