Google's Burden Grows Heavier

Investors are about to find out if Google (GOOG Quote) can deliver on Yahoo!'s (YHOO Quote) promise.

A week after Yahoo! reported strong third-quarter numbers, shares in Google have continued their skyward trajectory -- thanks in part to Yahoo!'s comments about the state of the paid-search business.

Now the question is whether Google's stock price -- up 5% over the past week, while Yahoo! has been flat -- can find support from whatever Google's tight-lipped management will say in reporting third-quarter results late Thursday.

"You head into Google's report knowing Yahoo! had a good quarter," says Schwab SoundView analyst Jordan Rohan. "I think it's likely Google will show very strong international growth and a respectable performance domestically." Rohan has an outperform rating on Google and a Street-high $180 price target.

On Wednesday, Google's shares were trading at $144.29 -- down $3.65 for the day, but up 70% from the $85 offering price at which the search engine operator's stock went public two months ago.

Organic Lopchu

Google, which will be reporting its quarterly results as a public company for the first time, poses a challenge for forecasters. While the company has supplied relatively detailed information about its sales and costs, its executives have indicated they don't plan to supply estimates to investors; their willingness to chat about current business trends remains to be seen.

The stock's fortunes have been boosted by a relatively small amount of freely tradeable shares, along with news that mutual fund players Fidelity and Legg Mason have taken major stakes. Google's climb has not only inspired less-than-positive ratings on the stock, but also led analysts to reconsider those outlooks.

On Tuesday, for example, American Technology Research's Mark Mahaney -- who downgraded Google from a hold to a sell on valuation issues earlier this month -- reiterated his sell rating on Google, though he qualified it somewhat: "As we wrote in our YHOO earnings review," noted Mahaney, "those results gave us, at the margin, less conviction in this call."

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