What makes the rise in GOOG’s shares all the more surprising is Friday’s WSJ story which said that Fox Interactive Media, parent of MySpace, will report results below expectations for the first quarter. (Disclosure: Like MySpace, the WSJ is owned by News Corp. (NASDAQ:NWS), and so is Barron’s.) Given Google’s comment one quarter ago that results were hurt by an inability to monetize all of its social networking inventory - a view that clearly reflected on its role as the advertising partner for MySpace - you might think the Fox Interactive news would be a negative for GOOG shares. But the market seemed to ignore it.

There were a couple of bullish notes on GOOG Friday morning that may have contributed to the upbeat tone, however. Here’s a rundown:

  • Jeffrey Lindsay, of Bernstein Research, took a look Friday morning at the reasons for the deceleration in paid clicks. He noted that Google has re-priced many low-cost keywords, boosting minimum bids to $10-$12 compared with some that sold for under a dollar. “We think that Google is implementing a change in its AdWords program to drive off the arbitrageurs and drive up pricing, and this was a major factor in the deceleration of Google’s paid click traffic this quarter,” he wrote. Lindsay thinks Q1 earnings will be on the weak side, but that the change in policy will drive up average keyword prices and reduce revenue leakage to arbitrageurs who use keywords to attract traffic and then redirect it.
  • Gene Munster, at Piper Jaffray, Friday focused on the impact on Google’s future results from the acquisition of DoubleClick. His view is that 2010 is the year when the benefits from the deal really kick in. “AdSense for Display could add 7-10% to Google’s net revenue in 2010,” he wrote. “While we realize this would be aggressive growth, we believe such an AdSense for Display platform could replace standard AdSense on partner sites as it could command higher CPCs and yield better response rates. Google may also be able to command a higher revenue share than standard AdSense as a result.”
  • Douglas Anmuth, of Lehman Bros., Friday looked at the potential impact on Internet company March quarter earnings from the weak dollar. “Average FX rates during 1Q suggest that [Internet] companies could potentially report the largest quarterly FX benefits in several years, stemming primarily from the further weakening of the U.S. dollar relative to both the Euro and the Japanese Yen throughout” the quarter, he wrote. “We believe eBay (NASDAQ:EBAY), Google, and Amazon (NASDAQ:AMZN) are likely to see the largest positive impacts in 1Q in terms of Y/Y growth given these companies derived 51%, 48%, and 45% of their revenue from international operations in 2007.” He sees more than 600 basis points of added growth from foreign exchange for eBay, 700-800 basis points for GOOG, and 700-800 points for Amazon.

The nice move by EBAY shares Friday was thanks in part to upbeat comments from Bank of America analysts Brian Pitz and Brian Fitzgerald. Just a week ago, the two analysts raised their earnings estimates on eBay’s first quarter. Friday, they followed with more table-pounding, asserting that “proprietary listings and conversion rate tracking data for the final week of the quarter provides further support for our expectation of a solid Q1 performance.” No EPS raise this time, but they did slightly raise their listings estimate for the quarter. Pitz and Fitzgerald now see listings growth up 14.5% year over year; they had been looking for 12.6% previously. They contend that reduced insertion fees have nudged sellers to add more inventory to the site. And they say that conversion rates have held steady despite the addition listings, meaning the recently installed fee reduction has boosted gross merchandise value.

In Friday’s trading: GOOG closed up $15.97 and dropped 49 cents in after-hours trading, to $470.60, for a gain of 2.95%; AMZN ended the day up $1.66 (1.78%) to $76.60; EBAY gained $1.22 by close, or 3.85%, to $32.94, and only lost a penny in after hours trading; YHOO had a brief gain during the day but lost ground after hours, down $1.00, to $27.44.