Google Inc. (NASDAQ: GOOG) is set to report earnings right after the close of trading today.  With fresh industry merger rumors abound, investors and traders alike will be paying very close attention to the biggest Internet giant on the planet.

Thomson Reuters has estimates of $6.67 EPS and $5.25 billion in revenues.  Google does not give guidance but for reference its next quarter estimates are $7.48 EPS and $5.77 billion in revenues.  Those earnings and revenue estimates are the same as last week but they are slightly lower than in August and July when there was a worry that the growth slow down was becoming a double-dip recession.

Keep in mind that revenue projections from Thomson Reuters are ex-Traffic acquisition costs and will be grossly different from the headline numbers reported by newswires.

Around $542, Google trades at just under 20-times the $27.25 EPS estimate for 2010 and about 17.25-times the $31.31 EPS estimate for 2011.  At issue here over the valuations is that Google only recently broke its trend of beating earnings expectations and there are many analysts who are still more bullish than the consensus.  Thomson Reuters has an average analyst price target of almost $617 per share, implying almost 14% upside to current prices.

The 52-week trading range is $433.63 to $629.51, and shares are up big from summer lows with gains of about 23% from the $440 level seen just before July 4.  From the $450 level at the end of August, Google shares are up about 20%.

Unfortunately, you know that means that the chart has been bullish until the stock petered out around $545 to $547 this week.  If Google disappoints with earnings like it did last quarter, investors should have some serious support below around $520 as the 200-day moving average is currently $519.11.

There are a few housekeeping items that investors will want to pay close attention to.  The first, outside of headcount, is that Google has moved into wind, unmanned cars, mobile operating systems, video delivery, apps, browsers, online publishing, location-based services, wireless infrastructure, and on and on. There may be less of identity crisis than it sounds, but these future initiatives all add up to cool great things but the payoff and the revenue stream remains elusive to many investors and analysts.

International revenues were 52% of total revenues last quarter.  The company ended last quarter with Cash and Cash Equivalents of about $31 billion.  At the end of last quarter, Google employed 21,805 full-time employees versus 20,621 full-time employees as of March 31, 2010.

Here is what was said about the paid-clicks operation in July: “Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 15% over the second quarter of 2009 and decreased approximately 3% over the first quarter of 2010.”

As far as who Google’s earnings can impact in the Internet, media, and advertising space… Easy, everyone.

JON C.  OGG

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