Is There Really a Recovery in the Works? Time to Check With Google.

Is the ad market really starting to rebound? Or is the (muted, cautious)  happy talk we we’re hearing this spring just happy talk? Time to take a peek at Google’s quarterly earnings this afternoon, which might give us some insight.

As per Google’s last report card, Wall Street is expecting the company’s revenue to decline from the previous quarter–unthinkable for Google (GOOG) in prior years, but now no longer a shock. But Wall Street will be looking for both numerical and qualitative hints that things are getting better, or at least have bottomed out.

The ever-helpful Mark Mahaney from Citigroup (C) has provided his usual “cheat sheet” to help interpret Google’s results (click to enlarge):

Marketers can buy Google ads instantaneously, without the haggling and lead time that traditional ads require. So conventional wisdom is that the company’s results will work as an early indicator for the general ad market and the greater economy.

But I talked to a search market exec last night who cautioned about reading too much into this afternoon’s results unless there’s a really big upside surprise. This is traditionally a slow quarter for search ads, he argues, so it will be hard to learn much from the results. The real key, he adds, will be the company’s Q3 numbers–if things are coming back, then Google’s September numbers will reflect that.

In the meantime, we can always hope that interrogators are able to get Google executives to provide them with meaningful answers on a wide range of topics, from the performance of Microsoft’s (MSFT) Bing search engine to the never-ending will-they-won’t-they talks with Yahoo (YHOO).

I’ll be covering the call live after the market close this afternoon; check back then for a link to a new post.

UPDATE: Results are in, and they’re okay. If you’re looking for a big vote of confidence in the ad market or the economy, this isn’t it. But it’s not bad, either.