Google: Both Sides Now

And that's key. Because the better Google gets at making ads into something you actually want to see and click on -- as opposed to something you labor to filter out -- the more attractive the Internet becomes to advertisers. That means Google can siphon off even more money from television, radio and print advertising. Sure, Yahoo! and others are catching up to Google quickly. But there could easily be new, big search improvements rolled out in 2006 that put Google ahead again.

Bullish Case No. 2: Mobile Search Breaks Wide Open

Right now, using search on a mobile phone or handheld is an onerous process that people use largely for novelty or when they desperately need an address or phone number. But what if it were as easy to search on your Motorola(MOT) Razr as it is on your Dell(DELL) PC?

For online ad firms like Google, it would be very big. It would mean enabling hundreds of millions of new searches per day and possibly jumpstarting local search, which has yet to fulfill its promise. Google Mobile has been available for a while, but can improve. The more intuitive and user-friendly Google can make this process, the more ads it can sell.

In overseas markets, where mobile devices are more tightly woven into everyday lives than they are here and where PCs are often not an option, the opportunity is even bigger. Much depends on what Google has in store: The company rarely tips its hand on new technologies, but if this area isn't a top priority this year, it's making a big mistake.

Bearish Case No. 1: Inevitable Backlash

Purely in terms of public perception of the company, 2005 came in like a bull and went out like a bear. Bloggers and journalists -- yes, me included -- grew critical, if not whiny and petulant. Comparisons with Microsoft(MSFT) became commonplace.