Google shares jumped 12 percent Friday, adding $10.6 billion to the company's market capitalization, after the search giant posted a third-quarter profit that flew past the already bullish expectations of Wall Street.

shares jumped 12 percent Friday, adding $10.6 billion to the company's market capitalization, after the search giant posted a third-quarter profit that flew past the already bullish expectations of Wall Street.

Shares closed up $36.70 to $339.90. Earlier, they touched an all-time high of $345.80 that temporarily pushed the company’s value beyond $100 billion for the first time. That put upstart Google, which went public just 14 months ago, on a par with about 20 venerable companies such as Coca-Cola. About 22.9 million shares traded hands on Friday, three times the average daily volume.

At least a dozen analysts raised their price expectations for the stock, with three—RBC Capital, First Albany, and Lehman—raising their target to $450.

Some other analysts put aside their worries about the stock’s rapid increase in valuation—it has more than doubled from a 52-week low of $141.62—and raised their rating on the stock.

Mark May, an analyst for Needham, raised his rating to “buy” from “hold” and set a relatively conservative price target of $370 supported by generally bullish comments about the company.

“Google remains the leading technology company in the consumer Internet space and arguably has one of the best platforms for expansion into new high-growth consumer Internet services,” he wrote.

Even so, Mr. May noted that risks remain in terms of competition from other large companies, declining margins, rising capital expenses, uncertain consumer acceptance of new services, and the acceptance by customers of new ad services.

Clayton Moran, an analyst with the Stanford Financial Group, raised his target to $380 from $360, saying he remains optimistic about Google’s potential to capitalize from the shift to online advertising.

“Internet advertising, especially on Google, is no longer considered experimental and advertisers

continue to look for new ways to capitalize on growing Internet usage,” he said. “As such, Google should further benefit from the secular migration from offline to online advertising.”

Earnings Rocket

Excluding one-time adjustments, the search giant said it earned $437 million, or $1.51 per share. The company had been expected to earn only $1.36 per share, according to analysts surveyed by Thomson Financial.

Thomson Financial

Revenue, excluding the traffic acquisition costs that Google shares with its partners, totaled $1.05 billion. Analysts had been expecting $944 million. Total revenue nearly doubled to $1.58 billion from $806 million in last year’s third quarter.

The company’s net income rose sevenfold to $381 million, or $1.32 per share, from $51.9 million, or $0.19 per share, in the third quarter of 2004. However, those figures included a variety of adjustments in both years, including a $202-million one-time charge in last year’s third quarter stemming from a settlement with Yahoo.

Yahoo

“We have had another in a string of record-breaking quarters in terms of both revenues and profits,” Google CEO Eric Schmidt said in a statement. “Our focus on end users and on quality of information and advertising worldwide continues to work extremely well.”

had another in a string of record-breaking quarters in terms of both revenues and profits,” Google CEO Eric Schmidt said in a statement. “Our focus on end users and on quality of information and advertising worldwide continues to work extremely well.”

In a conference call, Mr. Schmidt also commented on speculation that the company planned to expand its partnership with AOL. There has been broad speculation that Google and other Internet or broadband companies might acquire part or all of the Time Warner unit.

Time Warner

Valued Partner

“AOL has been one of our longest partners for many years, and we have teams that collaborate and see advertisers together. We have technologies involving advertising and video. That work continues and we hope that continues for many years. They’re a valued partner and we hope that will continue forever.”

Google said its assets had nearly tripled from a year ago, rising to $9.45 billion from $3.31 billion. The company now has $8.38 billion in current assets, including $5.52 billion in cash.

Google’s strong results follow on the heels of Yahoo’s results (see Yahoo Profit Lifts Stock).

Yahoo Profit Lifts Stock