Bullet points from Citigroup Internet analyst Mark Mahaney's December 9th note on Google:
• Based on positive macro datapoints and extensive INTERNET channel checks, we are increasing our estimates and our Buy conviction level in GOOG. Specifically for the December quarter, we are increasing estimates from $1,243MM net revenue/$1.69 pro forma EPS to $1,298MM/$1.75.
• Despite the potential loss of its AOL deal to Microsoft, we view Google's near-term competitive position as getting stronger, not weaker. Google has significantly increased its share of the Net advertising market (20% in '04 to 30% in '05), and we believe its share will continue to increase. Because: 1) GOOG remains the clear leader in search innovation; 2) GOOG's product development could allow it to materially gain share in large Net ad segments (branded and classifieds), where it has had limited presence to date.
• We Reit our Buy on GOOG and based on our estimates increase are increasing our PT to $490. Also making GOOG our #1 Net stock recommendation.
GOOG chart below; click to enlarge.