"We are now less concerned with the competitive threat posed by MSN over the near-to-intermediate term (beyond noise, of course)," writes Gallant, "and more bullish about the domestic search market's growth outlook in '05 and '06 even without a significant ramp in local search spending." The threat that the latest lockup will pressure Google's shares, says Gallant, is offset by the the pullback of Google's shares from their early February peaks. "Our analysis and client relationships suggest there will be enough institutional investor demand to soak up any supply that comes to market," writes Gallant. In assessing the risk that the latest lockup expiration will flood the market and drive down Google's share price, Gallant calculates that nearly half of the 177 million shares affected by the expiration are held by executives who have committed at least a portio of their holdings to scheduled selling plans. "Thus," he says, "we do not anticipate any incremental selling on their behalf." As for the 90 million remaining shares covered by the lockup, Gallant says a worst-case scenario would have Google employees selling 31.5 million of those shares, or about $6 billion worth of stock at current prices. While that's a lot of stock, Gallant says he believes there's institutional investor demand for it. If professionals buy up all the stock coming on the market in the worst-case scenario, he calculates, that would mean institutional holdings of $14 billion in stock, or 26% of Google's market capitalization. By comparison, says Gallant, Yahoo! ( YHOO) has $40 billion institutional ownership, amounting to 82% of its market cap; eBay ( EBAY) has $50 billion of shares, or 92% of its market cap, institutionally held, and Amazon.com ( AMZN) has $13 billion of such ownership, or 86% of its market cap.