Google's ( GOOG) sparkling third quarter left Wall Street searching for superlatives Friday.

The Mountain View, Calif., company saw its shares surge 12%, hitting an all-time high as analysts and investors tipped their hats to its Net search engine dominance. Few saw any reason to believe the party will end anytime soon. Google jumped $36.54 at midday to $339.74.

Brokerages including Goldman Sachs, First Albany, UBS and RBC boosted their price targets or implied value estimates on the stock above a once-unthinkable $400. Even more skeptical observers such as Merrill Lynch analyst Lauren Rich Fine, who rates Google shares neutral, joined the fray. She raised her net revenue estimates, reflecting revenue less the so-called traffic acquisition costs Google pays its partner, by $234 million this year and $374 million next.

"For 2006, we are now assuming that Google will increase its market share again before suffering some erosion," she wrote in a note to clients. "Previously we had assumed some decline in share in 2006." 

Google's gains come even as rivals including Microsoft ( MSFT), Yahoo! ( YHOO) and Time Warner's ( TWX) take increasing aim at the company. Microsoft plans to release a new version of Windows that will use MSN search as a default, and Yahoo! adding new features to its Web site such as podcasting and blogging. Both those companies, along with cable giant Comcast ( CMCSA), have talked with AOL about partnerships aimed at least in part in curbing Google's power.

But Google's rivals with have their work cut out for them because of the company's huge technological advantages, said Philip Remek, an analyst with Guzman & Co., who rates the shares underperform and doesn't own them, said in an interview.

"This is an emerging industry segment, and I don't think anyone really knows how much growth there will be in search," he said. "That uncertainty helps Google."

Friday's gains meant that Google shares have risen nearly 300% since the company came public in an Aug. 19, 2004, initial public offering. Even so, analysts including Jim Friedland of SG Cowen, which doesn't set price targets, are encouraging people to buy shares. Friedland predicts the company's performance will continue to improve as it gains market share.

"Although the market is highly competitive, we believe the company's dominant position is sustainable over the long term," wrote Friedland in a note to clients Friday. "We remain positive on Google and expect the shares to outperform the market by more than 35% over the next 12 months."

Merrill Lynch's Lauren Rich Fine was cautious in her Google praise.

"While we are raising our estimates this year and next, and believe a higher target multiple is warranted as confidence builds regarding the long-term growth rate, it isn't quite enough to produce over 20% returns," wrote Fine in a note to clients.

For his part, Friedland was less circumspect.

"Today Google has about a 1% share of global advertising on a gross basis. Paid search is the fastest growing segment of online advertising, which is the fastest growing segment of the advertising industry," Friedland said in an interview. He expects that to grow to 3% next year. "People are using search more and more for everything."

He added that Google and its partners now have 70% of the paid search market, and he says they will continue to gain share.

"The longer someone has been on the Internet, the more likely you are to use Google as a search engine," Friedland said, citing SG Cowen research. "That trend is going to be very hard to fight."