Updated from Nov. 23

Google

(GOOG) - Get Report

got the gold star from Goldman Sachs Tuesday night.

Goldman analyst Anthony Noto initiated coverage on Google with an outperform rating and a price target of $215.

News of the initiation sent Google's shares up $7.87 early Wednesday to $175.39.

The moves illustrate the volatility of Google, which went public at $85 a share in August and briefly topped $200 earlier this month.

On the one hand, Google's fans on Wall Street say it's the perfect way to invest in paid search, the fastest-growing part of the revived, fast-growing Internet advertising market.

On the other hand, skeptics attribute Google's phenomenal price rise to a relatively tiny amout of freely tradeable shares in the company -- a float that is bound to grow as millions of new shares come on the markup over the next few months.

In that environment, any standout items in the flow of news about Google, such as Noto's initiation, have had a clear effect on the stock price.

In his report, Noto forecasts that Google's earnings per share will enjoy compound annual growth of about 25% from 2006 through 2009.

The paid search market, says Noto, will grow 20% annually those years to amount to $19 billion worldwide in 2009. That growth reflects factors such as growth in the number of search queries, rates at which users click on advertisements, and the average price advertisers pay per click.

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