INSTANT VIEW: Google earnings rally after beating estimates

SAN FRANCISCO (Reuters) - Google Inc posted a better-than-expected profit on Thursday, defying fears the company is facing an Internet advertising slowdown and prompting a surge in its share price in extended trade.

COMMENTARY:

PETER DUNAY, CHIEF INVESTMENT STRATEGIST AT BROKER-DEALER MERIDIAN EQUITY PARTNERS IN NEW YORK

"Google's ad and total revenues were very strong. Earnings beat analysts forecasts nicely. Its 'paid per clicks' were very good and rose by 20 percent. This signals that the online advertising market is still healthy which should help Yahoo get a better price for its company if it does decide to sell to Microsoft."

JEFF DONLON, SENIOR ANALYST, MANNING & NAPIER ADVISORS INC,FAIRPORT, NEW YORK. OWNS GOOGLE IN MANNING & NAPIER EQUITY FUND

"It looks pretty solid. I think the only thing that stands out for me on the negative side is the $842 million in capital expenditures. Cap ex has been high relative to the sales growth rate. The traffic acquisition cost rate looks low."

COLIN GILLIS, ANALYST WITH CANACCORD ADAMS

"It's a good time to be a Google bull. The boys delivered. They posted very strong results and the opportunities for Google remain tremendous internationally."

"$4.84 is a very healthy number, especially when consensus was at $4.52 and we were at $4.59."

"The thing about Google is it's very direct marketing focused. They deliver a clear return on spend to the clients. It shows that as long as the virtuous spread is intact, advertisers will be allocating Google spend to the Google platforms."

MARTIN PYYKKONEN, SENIOR INTERNET-MEDIA ANALYST, GLOBAL CROWN CAPITAL

"They beat and it was well balanced across the board. Net revenue was up 48 percent year over year and then it was just really a well-balanced flow through on the whole income statement -- there were no tricks like a lower tax rate. It was just kind of a good balance -- not any one thing that had made up for another area."

"Paid click ... decelerated from last quarter. I personally would like to see the paid click a little bit higher. What that's showing is there was some impact of better pricing in the quarter. Clearly the area that Google was trying to focus on -- having more relevant searches -- is working."

"The shares are trading at only 25 times the Street's 2008 earnings estimates which to me is still a good value proposition."

"For all of the talk and the worry a good clean quarter...and the stock is still reasonably priced. A good, solid story continues and the whole Microsoft-Yahoo thing, the mating dance that's going on is, if anything, helping Google competitively."

(Reporting by Gina Keating and Sue Zeidler in Los Angeles, Doris Frankel in Chicago, and Calvin Mankowski in New York)