Updated from 7:16 a.m. EDT

It's

Google's

(GOOG) - Get Report

turn at bat -- and investors are growing more hopeful for another home run from the search-engine giant.

Only a couple of weeks ago, Wall Street was expressing concern that Google could post lukewarm numbers. "The sentiment on search has not been enthusiastic for much of this quarter," said Mark Mahaney, an analyst at American Technology Research, which does no underwriting for companies. "There's been some thinking that Google will miss its numbers."

But

Yahoo!'s

(YHOO)

strong earnings, which showed search-related advertising was strong in a quarter when branded advertising was expected to carry the day, bodes better for Google. "The Yahoo! results give us greater conviction in our Street-high Google estimates," said Mahaney, who before Yahoo!'s report was expecting Google to beat the consensus of 75 cents a share in GAAP profit.

Google and Yahoo! may be dominating the market for search ads, but Google's presence has been stronger internationally, and it has shown a stronger talent for monetizing search. That is setting the stage for great expectations for the search giant. Marianne Wolk, an analyst at Susquehanna Financial, notes that Google controls 65% of non-U.S. search, opening the possibility of search growth rate exceeding Yahoo!'s.

"Google has a tendency to surprise, even when the market is expecting them to beat," says an investor at a hedge fund that has been long Google in the past. "They don't have a track record of delivering bad news. In this market and with poor visibility, who knows? But the sentiment is now leaning toward something positive."

And with Yahoo! having dispelled many of the lingering concerns over signs of a drop in pricing of sponsored-search results -- it now appears that pricing may have been affected by a rise in volume as more search terms were bid on -- it's suddenly as if the clouds that were sitting above Google's stock performance are clearing.

Google's stock surged 13% the day after it delivered a blowout quarter in early February, beating the Street's estimates by 10 cents a share. After peaking at $216.80 on Feb. 2, Google's stock slid steadily but slowly to as low as $174.21 in mid-March. It has since risen to $196.76 in Wednesday trading, including a 2.8% gain Wednesday on the back of Yahoo!'s report.

The shares were up $1.65, or 0.8%, to $199.75.

In the wake of Yahoo!'s report, analysts were starting to approach a gushing tone in their reports on Google. Safa Rashtchy of Piper Jaffray placed a $250 target on Google stock Wednesday in a report that gave a very sunny outlook not only for the first quarter but for several years ahead.

"Google is heavily undervalued given its sustainable leadership position in the growing search market, as well as facing several new growth opportunities," Rashtchy says in his report. "Google's strong brand name, leading technology, solid international presence and culture of innovation are key attributes that will make it very difficult for Google's competitors to catch up."

Rashtchy says that the search market will grow from $7.5 billion this year to $22 billion in five years, and Google will control a healthy share of it. "Over the next five years, we expect Google will generate significant revenues from a number of new areas. These new segments could comprise 15%-20% of Google's revenues by 2010, and be dominated by three areas: local advertising, mobile opportunity and advertising network." (Piper Jaffray has received compensation from Google for investment-banking activities in the past year.)

Still, there remain some potential trouble spots for Google. One of the concerns increasingly cited is click fraud, in which sites are set up solely to host links from Google and Yahoo!. An automated bot clicks on the links, and the owners of the fake sites collect a portion of the ad revenue.

"Nobody really knows how serious click fraud is now except Google and Yahoo!," says Mahaney. "It's something that I'd hope they would address in the conference call. It's probably a cost of doing business, and maybe a manageable cost." (Yahoo! didn't address the problem in its call.)

Google is facing at least one lawsuit related to click fraud and a number of others regarding its news service and other initiatives. The lawsuits reflect less on unethical activities than the fact that Google is first in a number of emerging areas. Being first in a new technology often means being the first to face the inevitable legal questions that arise.