Google's first quarter guessing game underway; Is international a buffer?

Google controls 64.4 percent of the worldwide search market and that international effort could offset any turbulence in the U.S., according to Piper Jaffray. 

Piper Jaffray analyst Gene Munster makes that international point in a research note. Google's February search market share was 64.4 percent globally, down from 63.7 percent from January. That dip was largely attributed to the timing of the Chinese New Year. 

Munster says:

We believe this growth demonstrates Google's ability to continue to reach new searchers as well as promote increased search on a worldwide level. The bottom line is Google's International story, which can be overlooked by the deluge of U.S. based data, appears to be very healthy in terms of gaining and keeping new users.

As the first quarter winds down, analysts have been examining every Google search metric from comScore they can find. Here's the quick scorecard:

• International query volume is up 12 percent sequentially this quarter compared to Munster's 5 percent projection;
• U.S. paid click data is tracking down 4 percent sequentially in the first quarter from the fourth quarter (Munster was expecting growth of 2.5 percent);
• U.S. query volume is tracking up 8 percent in the first quarter relative to the fourth quarter. 

Here's what Munster had to say last week about Google's paid clicks:

In the past 3 weeks, we have spoken to 3 SEMs (Search Engine Marketers) and 4 private companies that conduct paid search. Our conversations with these paid search participants indicate that CPCs may have been better than expected through February as our sources suggest CPCs have remained largely flat. To put this in perspective, if paid clicks in the U.S. ended down 4% q/q (rather than up 2.5%) and CPCs flat, there would be no impact to net revenue. One additional takeaway from our checks that we view as key to our thesis of Google being insulated is that every check indicated Google continues to be the must buy inventory online. The checks also suggested that advertisers are pulling dollars allocated to other online media and shifting it to search given the medium's efficiency. 

And here's how paid click data has worked as a predictor:

Add it up and Google should be able to hit Wall Street's quarterly targets for the first quarter.  Wall Street is expecting Google to report first quarter earnings of $5 a share on revenue of $4.12 billion. Gross margins are expected to be about 81.49 percent.