US Internet giants are expected to report strong revenue and profit growth for the final quarter of last year, driven by the ongoing shift in advertising and retail dollars to the Web and goosed by the holiday rush.
Both online advertising spending and e-commerce sales continue to leap ahead at double-digit percentage rates, significantly surpassing growth in the offline world.
The result, analysts say, should be strong growth for Internet bellwethers Google Inc, Yahoo Inc, eBay Inc and Amazon.com Inc.
Goldman's Anthony Noto said in a note to investors that Google's net revenue could be anywhere between 20 percent and 30 percent higher than in the September quarter, versus his official 20 percent forecast.
Anticipation of strong results has driven Google's stock to new highs. It reached an all-time high of US$475.11 on Wednesday, marking a 175 percent rise from its 52-week low of US$172.57, set March 14.
The Web search giant's remarkable growth trajectory has proven tough to predict, particularly without the aid of company forecasts -- which Google famously declines to provide.
The company's ascent has been driven not only by rapid adoption of search marketing but also by improving revenue per search and overseas expansion. Its expected efforts to step up profits from new products, particularly listing service Google Base, should add another tricky element to the mix this year.
"Google is an iconic company that, like Microsoft and eBay before it, has defined a new and vital industry," Piper Jaffray analyst Safa Rashtchy said recently in a note to investors.
"It is singularly well-positioned to benefit from the growth of online advertisement and search" and go beyond that with "innovative new products that have redefined the consumer Internet experience," Rashtchy said.
Yahoo, which on Tuesday kicks off the reporting season for Internet companies, is also expected to report strong results, albeit likely again overshadowed by high drama at Google.
"Yahoo's branded business should benefit from a combination of volume and pricing growth, driven by the holiday shopping period and by continued migration of ad dollars online," Jefferies & Co analyst Youssef Squali said.
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