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Last week I wondered about the logic behind a gutsy market call by American Technology Research advising investors to buy Yahoo! (Nasdaq: YHOO  ) and dump Google (Nasdaq: GOOG  ) . With both companies set to report quarterly earnings in October -- and each one happily suckling the mother's milk of paid search -- it didn't make sense to project a divergence.

If Yahoo! was going to put up a strong effort -- and it did -- Google was only going to be even better a week later.

That's exactly what happened. If you thought Yahoo! posting an 84% spike in third-quarter revenues was sweet, then you're probably stoked to see Google growing the top line during its first quarter as a public company by 105%. Profits nearly doubled for Yahoo! last week? They more than doubled for Google.

Through the first nine months of the year, Google has produced earnings of $0.73 a share on nearly $2.2 billion in revenue. Consider the $349 million in free cash flow that the company has generated through those three quarters and, let's be honest, it's not exactly easy to justify the company's $40 billion market cap.

However, the fact that the stock has risen by more than 50% since going public is more a testament to brand endearment than rational valuation. That may sound like a flimsy way to justify a stock's buoyant share price -- and you would be right -- but short sellers nursing headaches can feel the pain.

As an investor, it's not just a matter of getting it right on valuation. You have to nail it on market sentiment too. Until Google flashes signs of fragility or mortality -- and its stance on not providing financial guidance is bound to trigger wide analyst targets to the point where it may be difficult to please everyone every three months -- it would be a tough call to tell investors to jettison the shares.

What if Microsoft (Nasdaq: MSFT  ) comes back strong in search? What if the company uses its nearly $2 billion in cash on iffy acquisitions? What if insiders start cashing out at these tempting prices in a few months?

Yet you also have other questions that can propel Google higher. What if Microsoft doesn't come back strong in search? What if the company uses its IPO money to scoop up smaller rivals like Ask Jeeves (Nasdaq: ASKJ  ) and (Nasdaq: FWHT  ) that would be accretive to earnings? What kind of effect would the shares have if Google gets added to popular stock indexes?

Questions beg for answers. The fact that Google is a search specialist playing it coy when it comes to looking ahead is ironically intriguing. For now, all we have is a snapshot -- and that's a pretty picture.

Would you buy Yahoo! as a $50 billion company over Google at $40 billion? Where will Google grow from here? All this and more in the Google discussion board. Only on

Longtime Fool contributor Rick Aristotle Munarriz is a happy Google user. However, he does not own shares in any of the companies mentioned in this story.

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