The online advertising world, languishing since late 2008, will turn its lonely eyes to Google Oct. 15, when the search giant is expected to announce third-quarter earnings after the bell.
Bernstein Research said it expects Google to beat consensus expectations modestly, raking in earnings per share of $5.44, compared with Wall Street's consensus of $5.36.
The research firm also expects Google's net revenues to top $4.35 billion, versus the consensus of $4.21 billion.
"We expect Google's results to show some signs of cyclical improvement in Q3, as easier comparisons and more favorable currencies should benefit topline trends," Bernstein analyst Jeffrey Lindsay wrote in a research note. "Paid search is an early cycle advertising format given the immediacy of keyword auctions, and Google has maintained its dominant position within the category."
Broadpoint AmTech analyst Benjamin Schachter said channels checks showed that Google's core search advertising business reaccelerated in the third quarter.
"Although ad buyers continue to exercise caution with how budgets are being allocated, we believe search continues to be the beneficiary of a shift away from less targeted/less ROI-oriented media and a clear beneficiary of macro improvements and Google's monetization improvements," Schachter wrote in a research note.
Credit Suisse analyst Spencer Wang was also bullish, noting that Google's advertising revenue will benefit from improved consumer spending and higher ad spending. Wang increased his price target to $600 from $475, according to a report from the Associated Press.
With respect to search innovation, the third quarter was certainly a busy one for Google. The company this month rolled out new Search Options to let users refine search results, adding search by hour and date range functions, as well as adding the ability to sift through books, blogs and news.
In September, the search engine introduced Google Fast Flip to offer users a different way to browse magazines online, and unveiled its Sidewiki annotation service. Google began indexing Hot Trends in search results, too.
Google moved to boost its online display ad business by launching the DoubleClick Ad Exchange, targeting Yahoo's world-leading 20 percent display ad share.
Overall, the online ad space appears to be resuscitating. Citing Internet Advertising Bureau data that found U.S. online advertising fell 5.4 percent year-over-year in Q2, Bernstein's Lindsay said Q2 likely represented the "bottom" for U.S. online advertising growth, given a stabilizing economy and easier comparisons.
"We forecast U.S. online advertising to drop 4 percent year-over-year in Q3, and remain flat in Q4," Lindsay wrote.
Meanwhile, financial analysts sitting in on Google's Q3 conference call Thursday will likely be looking for more guidance on Google's efforts to make money from mobile search and display ads shown on YouTube.
The video-sharing property recently reported it is showing 1 billion videos per day. Google CFO Patrick Pichette went on record in the Q2 call saying that "YouTube will be very profitable in the not-too-distant future."