Goldman moves GOOG and YHOO, but should it?

Includes: AABA, GOOG
by: David Jackson

Goldman analyst Anthony Noto raised his price targets today for Google and Yahoo. A Goldman report states:

"Branded advertising looks to be moving from
trials & tests to a mainstream portion of the  largest advertisers
branding campaigns.  Anthony Noto’s channel checks with media buyers,
along with regular analysis of the top 200 advertisers’ presence on
Yahoo, points to expanding adoption. In addition, ongoing growth in
online shopping (Noto’s 6th  annual survey estimates 25% growth in the
2004 holiday season) is spurring increased paid search. Bottom-line:
Google and Yahoo! estimates have been raised again and both remain
favorite ideas."

Quick thoughts: (1) Noto's
estimate of 25% growth in holiday online shopping is lower than what is
currently priced-in to the stocks, since comScore estimated 28% growth.
(2) What kind of data point is his channel check with media buyers,
that shows that they increasingly want to use online branding
campaigns? Hard to extrapolate hard numbers from that about this
quarter's earnings for Yahoo and Google.

Stock impact: Not sure Noto's estimates revisions have much
value here. Their impact may be to raise expectations for the search
stocks, setting them up for disappointment when the companies report
numbers later this month.