Internet advertising looks like it will continue its recovery this year. And that's good news for Yahoo! ( YHOO).The Internet bellwether, slated to report first-quarter results next Wednesday, started this week with a buy rating from American Technology Research, which cited a bullish outlook for Internet advertising, among other factors. Meanwhile, Credit Suisse First Boston, which rates Yahoo! an outperform, raised 2004 estimates for the company on the basis of faster-than-anticipated improvement in Yahoo's online advertising business. The research notes indicate that Yahoo! -- whose stock has more than doubled over the past year and trades at more than 90 times estimated 2004 earnings -- still hasn't worn out its welcome on the sell side. Yahoo!'s shares fell 32 cents Wednesday to close at $48.47. Initiating Yahoo! with a price target of $64, ATR analyst Mark Mahaney called Yahoo! his top buy recommendation among large-cap Internet companies -- for investors with a 12-month time horizon. (In other coverage initiations Wednesday, Mahaney assigned buy ratings to Amazon ( AMZN) and eBay ( EBAY), and a hold rating to InterActiveCorp ( IACI).) One of the key factors driving Yahoo! is the growth of Internet advertising, writes Mahaney. He forecasts overall growth in 2004 U.S. Internet advertising of 30%, up from 20% growth in 2002, though behind the fourth-quarter 2003 year-over-year growth rate of 38%. Branded advertising will grow 22% in 2004, Mahaney forecasts, up from 18% growth in 2003. Search ad growth -- through Yahoo!'s Overture subsidiary -- will be up 130% in 2004, thanks in part to local search and monetization of international search. Yahoo!'s EBITDA margin, or earnings before interest, taxes, depreciation and amortization as a percentage of revenue, will rise from 32.2% in 2003 to 38.8%, ahead of the 35.6% that Mahaney terms the implied high end of the company's guidance. And just as the company beat earnings guidance last year, he expects that Yahoo! will beat the current consensus of 53 cents in earnings per share for 2004 by 6 cents.