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I Wouldn't Dare Bet Against Google

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Strong and steady, slow to fade
Swift, short-sighted pain
Long lies Valhalla ahead
Like halls of golden light
-- Edda-style Viking poetry in honor of an industry titan

Google (Nasdaq: GOOG  ) is not in the habit of disappointing its investors. The world's biggest name in online search and advertising tends to knock down analyst targets and expectations, or miss by margins so small that you might just call it a wash.

But things might be different this time, as Google prepares for its first-quarter report on Thursday night. Does that mean you should hit the panic button and sell every Google share? Read on.

The story so far
Don't get me wrong -- Google is still No. 1 over search impostors like Yahoo! (Nasdaq: YHOO  ) , Microsoft (Nasdaq: MSFT  ) , and IAC/InterActive (Nasdaq: IACI  ) . Quarter by quarter, month by month, the independent traffic reports drop in, invariably reinforcing Google's stature, head and shoulders above the rest. But lately, Google has actually lost a tiny sliver of its market share to Yahoo! and the rest. Uh-oh.

The flagging economy, coupled with declining profits and budget-tightening, could reduce Google's moneymaking ad placement services as its advertising customers rein in spending.

Google has been acting like there's something wrong, too: There are layoffs afoot in Mountain View.

Panic! Right?
Well, no. For one thing, Google's stock has taken an NHL-grade beating over the past year and its recent underperformance is potentially pricing in many -- maybe all -- of these issues. Even a bad report this week seems more likely to cause a hiccup than a train wreck. Day trading around an expected price drop here seems risky, because substantial good news could make a huge difference.

And that's the other thing: Google has a tendency to pull magic rabbits out of its hat. Traffic figures are straightforward, but the company is always tinkering with the code that makes it tick, way out of the public eye. "We are producing more relevant ads against more queries every time. Relevancy against commercial queries equals ROI, which equals revenue for Google," said CEO Eric Schmidt in last quarter's analyst call. We just can't see the effects of these changes until the quarterly report goes live.

Whammies, whammies, whammies!
I'm holding onto my Google shares with an eye to the far future. A short-term pop this week only helps you if you're ready to sell the stock. But I'm actually hoping for a severe disappointment, giving us all a chance to stock up on deep-discount shares again. That's how you ride a Rule Breaker: Buy more on the inevitable dips -- and surf the long, rich swell.

Further Foolishness:

Microsoft is a Motley Fool Inside Value pick. Google is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like. The Motley Fool is investors writing for investors.

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