Net Ads Golden to Google

Some of that demand, writes Noto, is trickling down to specialty sites such as the technology news and information site CNet (CNET Quote) and the female-focused iVillage (IVIL Quote).

Branded online advertising is "poised for a breakout year in 2005," writes Noto, whose firm has done banking for both Google and Yahoo! within the past year. (Noto calculates a per-share "implied value" of $215 for Google and a range of $39 to $44 for Yahoo!.)

As for Noto's new estimates, he says Google's net revenue will amount to $592 million in the fourth quarter, up from his prior estimate of $579 million, and ahead of the Thomson First Call consensus of $584 million. Earnings before interest, taxes, depreciation and amortization will amount to $378 million, says Noto, compared with the First Call median of $358 million.

Yahoo!'s fourth-quarter revenue will be $773 million, says Noto, ahead of the consensus of $754 million. EBITDA will amount to $322 million, he says, ahead of the $308 million mean.

The accuracy of those new estimates won't be be tested for several weeks: Yahoo! is slated to release fourth-quarter financial results Jan. 18, and Google is scheduled to disclose its quarterly numbers Feb. 1.