Google’s 2nd-quarter results expected to provide insight into e-commerce strength

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High hopes riding on Google’s 2nd-quarter results

MOUNTAIN VIEW, Calif. — Google Inc. will signal whether electronic commerce is still building on its recent momentum with the release of its second-quarter earnings after the stock market closes Thursday.

Besides running the Internet’s most popular search engine, Google also powers the Web’s largest advertising network. That makes its performance a closely watched barometer of the Internet’s economic health.

The results will either ease or exacerbate investor concerns about the Internet search leader’s growth prospects as it faces stiffer challenges from Facebook and Microsoft while it also tries to navigate through a still-sluggish economy, especially in Europe.

Despite those worries, the expectations for Google remain high.

The average earnings estimate among analysts polled by Thomson Reuters is $6.52 per share — a 22 percent increase from the same period last year. Those figures exclude Google’s expenses for employee stock compensation.

After subtracting the commissions paid to its advertising partners, Google’s net revenue is expected to rise by about 20 percent to $5 billion.

If Google hits that target, it will mark the company’s second consecutive quarter of at least 20 percent growth after its revenue edged up by just 9 percent amid last year’s deepening recession.

Investors also will be focusing on how much more frequently people were clicking on Google’s ads during the quarter and how much more marketers were willing to pay to reach Web surfers.

In midday trading, shares of Google fell $3.31 to $488.03.

(This version CORRECTS the rise in earnings from last year.)