Speculation about a potential Google/Bing swap on Apple’s platforms has swirled for months, but Barclays Capital analyst Douglas Anmuth notes that we’ll get our first real clue in a couple days.

When Apple ships its first iPads on Saturday, lots of Google (GOOG) investors will head straight to the gadget’s Web browser to see which search engine Apple (AAPL) is using as its default choice. Straightforward logic: If Bing ends up on the iPad, then the iPhone–with its installed base of 48 million units–would be next.

Microsoft (MSFT) would certainly like to have pole position, and Anmuth notes that the company has bought Bing some distribution via toolbar deals with HP (HPQ), Dell (DELL), Verizon (VZ) and others. So what does he think will happen this weekend?

Overall, we believe there is a better than 50% probability that Google remains the default on Apple mobile devices–if nothing more because Apple is extremely focused on the user experience and Google’s 65%+ search market share speaks for itself. As a result, Apple may not want to risk disrupting the iPad or iPhone user experience with a shift to Bing.

Shorter version: Google may stay. Or go. We’ll see.

To its credit, Google (GOOG) has never said otherwise. But Citigroup’s Mark Mahaney takes a stab at guesstimating exactly how many new phones the search giant will sell and what that means for its earnings. Answers: Not a lot and not much.

Specifically, Mahaney thinks Google might ship one million to three million phones in the first year, which could generate up to $1.6 billion in additional revenue, and perhaps another 55 cents in earnings per share. That’s about half the estimate from Douglas Anmuth of Barclays (BCS) earlier this month. Mahaney cites both Flurry’s modest first-week sales estimates as well as internal Citigroup (C) research, to support his numbers.

He also provides some interesting context via this table, which compares the first-year sales for Apple’s (AAPL) various iPhones, Palm’s (PALM) Pre and Pixi models, and Motorola’s (MOT) Droid, which of course uses Google’s Android OS, just like the Nexus One. Click to enlarge:

One sort-of throwaway point: Mahaney notes that any benefit the Nexus One generates for Google this year may end up balancing out the money it could lose if it leaves China.

This year, says Barclays analyst Douglas Anmuth. He predicts that the video site will see revenue jump 55 percent, to $700 million, in 2010, and that it will “start contributing positively” to the Google’s earnings.

Why? Because YouTube is ginormous, of course. But also because the company has become more sophisticated about advertising. (Note that Google content guru David Eun said much the same thing when I talked to him last month, specifically citing the Google’s integration of DoubleClick).

Here’s the relevant part of Anmuth’s note:

Perhaps the main take-away for Google’s display business is that in 2010 we believe YouTube will start contributing positively to EPS. An improving advertising environment certainly helps, but with YouTube monetizing more than 1 billion video views every week, and with strong sell-out rates on its home-page from larger advertisers–we note 90% of the top 50 Ad Age have advertised on YouTube–we believe the site can profitably take share of the branded display & video market. We project YouTube to generate $700 million in revenue in 2010, up 55% Y/Y. Usage continues to grow. In November the total number of YouTube’s videos viewed grew 139% to 12.2 billion in November and unique visitors grew 32% Y/Y to 129 million. As a comparison, Hulu, the second most popular video site by videos viewed according to comScore, recording 923 million videos viewed.

Of course, the standard caveats that Google (GOOG) uses when people generate less flattering estimates for YouTube also apply here. It’s very difficult to get a handle on how many pages/views Google is selling and how much it gets for each one. It’s also tricky to guesstimate how much Google is spending to serve more than a billion video streams a day. So at best, this is an educated guess.

Still, it will be interesting to see if Google concurs with Anmuth. We’ll hear from Eric Schmidt et al in a week when the company reports fourth-quarter earnings.

Anmuth says his research shows an increase in pricing for Google’s search ads over the past few months, particularly in the battered retail and auto sectors. His note comes a couple days after Citigroup’s Mark Mahaney raised his Google estimates, citing a dramatic improvement from mid-August to mid-September.

Other Google bulls: Investors, who have been pushing up the company’s shares since March (they’re now hovering near the $500 mark again), and CEO Eric Schmidt, who declared this week that “it’s clear that the worst is behind us.”

The tempered enthusiasm isn’t limited to Google’s chances, by the way. Mahaney also had good things to say about Yahoo’s (YHOO) chances as the economy recovers. While Yahoo is handing over its search business to Microsoft (MSFT), Carol Bartz and crew still dominate the display ad business, and that should be picking up as well, he said.

It is worth noting that Yahoo executives themselves were more cautious this week when asked to describe market trends: At an Advertising Week press conference, Bartz brought out her “still bumping along the bottom” line, while EVP Hilary Schneider said ad sales had stabilized but that she “wouldn’t go so far as to say as we’re seeing a full recovery.”

Seems the Street would have much preferred the “boatloads of money” Yahoo CEO Carol Bartz once said she’d demand for a search deal, than the “boatloads of value” she claims to have given them this morning. As I write this, Yahoo (YHOO) shares are trading down more than 12 percent at $15.14. Microsoft (MSFT) shares are up 1.41 percent at $23.80.

Below, a roundup of analyst notes that have been issued on the deal.

Jeff Lindsay, Bernstein Research: We believe Yahoo!’s search deal represents a significant positive for the company’s economics, as both Yahoo! and MSFT were too subscale to compete effectively versus Google. Although the combined 30% search share is still less than half the size of Google, both Yahoo! and MSFT will realize significant cost savings from combining their search technologies. In addition, the greater scale should increase the effectiveness of the search engine, driving revenue synergies through improved search monetization.

Sarah Friar, Goldman Sachs: We view the deal as positive for Microsoft as terms are better for the company than had been speculated (no upfront fee; 88% TAC) and the combined market share provides scale to drive efficiency and legitimacy/relevancy for Microsoft’s online investments. Yahoo!’s $3.0 bn/year search sales translates to $360 mn/year for Microsoft in revenues. Microsoft will incur incremental expenses when the deal closes (expected early CY10), but limited (if any) impact on FY10E and while investments will continue into FY11, our model already assumes sizable expenses.

Douglas Anmuth, Barclays: YHOO-MSFT terms not nearly as favorable as anticipated, but we believe deal is neutral to the co’s L-T positioning. We would have liked to have seen an upfront payment, higher TAC, & rev share on Bing.com searches among other things, but we like that YHOO maintains ability to sell search adv, & therefore relationship with its largest advertisers. It’s unclear how favorable the deal will be to YHOO over time, but our fundamental reasons for owning shares remain the same. We expect better execution on the audience & content biz & specifically within display adv., & we believe YHOO will be able to take out a meaningful amount of costs from the biz aside from search tech. over the next couple yrs.

Peter Misek, Cannacord Adams: We are relieved that Microsoft did not have to provide an upfront payment as part of this deal while effectively garnering more scale. This deal provides Microsoft with a much needed boost in competing with Google (GOOG : NASDAQ : US$435.00 | BUY) as its search algorithm, Bing, is being catapulted to greater market share. In addition, utilizing Yahoo!’s sales force for premium search will allow Microsoft to lower expenses over the duration of the partnership while attempting to attract a greater level of advertisers for the combined platforms. We believe this is a much needed relief for Microsoft, but is one step in a greater battle. In the end this doesn not solve Microsoft’s competitive disadvantage with Google. Rather we think it accelerates Microsoft’s desire to think outside the box and come up with a non-linear way to catch Google.

Heath Terry and Andrew Thomas, FBR Capital Markets: The lack of an up-front payment, no minimum revenue guarantee, and a revenue share that, while above average, is slightly below the +90% that larger deals command make for a lackluster deal for Yahoo!, in our opinion. The lack of any display component to the deal also seems like a missed opportunity for the company. As we see it, the only financial benefit to Yahoo! is the ability to shed the not insignificant technology costs associated with running a search engine. According to the company, this should result in an annual benefit to GAAP operating income of $500M….Restructuring these two businesses and untangling them from their existing partnerships and internal ties will be a massive organizational challenge for both companies.

Mark Mahaney, Citi Investment Research: Implications For YHOO – Positives: 1) YHOO believes deal would generate incremental $250MM in annual cash flow (17% accretive to our ’09 est)–assumptions very hard to test, but magnitude is reasonably conservative; 2) 88% TAC is higher than industry average, but as expected given deal size. Challenges: 1) No upfront payment to YHOO is a negative vs. expectations, tho guaranteed RPS provides significant backstop; 2) Lack of display advertising deal is a negative vs. expectations; & 3) Acknowledgment of YHOO’s Search technology limitations.

Todd Greenwald, Signal Hill Capital Group: The deal announced today will take a very long time to come to fruition we think, and will face several challenges–it will face regulatory hurdles given Microsoft’s antitrust history (though we’d expect it to ultimately get through given Google’s dominance). Additionally, it seems hard to fathom operationally, as it will require Yahoo’s salespeople to be selling Microsoft’s technology. Advertisers will want one point of contact (which would be Yahoo), though that point of contact won’t be entirely responsible for what they are selling–instead of bringing in an engineer from within the same building, the Yahoo salesperson may have to coordinate with a Microsoft employee up in Redmond. Not impossible, just tricky. And considering how smooth and automated the process of buying ads is on Google’s platform, this could prove to be a competitive disadvantage.

Mark May, Needham & Company: Search advertising is not a zero sum game, in our opinion. If Microsoft is able to make Yahoo! (and Microsoft) search more effective through this deal/combination, then we believe is will result in advertising spending more on the new search platform but not less on the Google platform. A more effect Yahoo!/Microsoft search platform does not mean Google search becomes less effective, and we believe there is more demand than supply for effective search marketing. The dollars will likely come from other, less effective, buckets.

Business 101 convincingly argues that most large M&A deals and partnerships are not successful. And, most large-scale Internet media M&A deals and partnerships have tended to under-perform their original promise (e.g., AOL Time Warner, Google/MySpace, etc.). Moreover, in the case of Yahoo!/Microsoft Search, you have two very different cultures and an expected 24 month transition process. The odds are stacked against this deal having a meaningfully impact on Google. And, over the next 2+ years while Yahoo! and Microsoft are trying to transition, Google will be innovating.

Seems the Street would have much preferred the “boatloads of money” Yahoo CEO Carol Bartz once said she’d demand for a search deal, than the “boatloads of value” she claims to have given them this morning. As I write this, Yahoo (YHOO) shares are trading down more than 12 percent at $15.14. Microsoft (MSFT) shares are up 1.41 percent at $23.80.

Below, a roundup of analyst notes that have been issued on the deal.

Jeff Lindsay, Bernstein Research: We believe Yahoo!’s search deal represents a significant positive for the company’s economics, as both Yahoo! and MSFT were too subscale to compete effectively versus Google. Although the combined 30% search share is still less than half the size of Google, both Yahoo! and MSFT will realize significant cost savings from combining their search technologies. In addition, the greater scale should increase the effectiveness of the search engine, driving revenue synergies through improved search monetization.

Sarah Friar, Goldman Sachs: We view the deal as positive for Microsoft as terms are better for the company than had been speculated (no upfront fee; 88% TAC) and the combined market share provides scale to drive efficiency and legitimacy/relevancy for Microsoft’s online investments. Yahoo!’s $3.0 bn/year search sales translates to $360 mn/year for Microsoft in revenues. Microsoft will incur incremental expenses when the deal closes (expected early CY10), but limited (if any) impact on FY10E and while investments will continue into FY11, our model already assumes sizable expenses.

Douglas Anmuth, Barclays: YHOO-MSFT terms not nearly as favorable as anticipated, but we believe deal is neutral to the co’s L-T positioning. We would have liked to have seen an upfront payment, higher TAC, & rev share on Bing.com searches among other things, but we like that YHOO maintains ability to sell search adv, & therefore relationship with its largest advertisers. It’s unclear how favorable the deal will be to YHOO over time, but our fundamental reasons for owning shares remain the same. We expect better execution on the audience & content biz & specifically within display adv., & we believe YHOO will be able to take out a meaningful amount of costs from the biz aside from search tech. over the next couple yrs.

Peter Misek, Cannacord Adams: We are relieved that Microsoft did not have to provide an upfront payment as part of this deal while effectively garnering more scale. This deal provides Microsoft with a much needed boost in competing with Google (GOOG : NASDAQ : US$435.00 | BUY) as its search algorithm, Bing, is being catapulted to greater market share. In addition, utilizing Yahoo!’s sales force for premium search will allow Microsoft to lower expenses over the duration of the partnership while attempting to attract a greater level of advertisers for the combined platforms. We believe this is a much needed relief for Microsoft, but is one step in a greater battle. In the end this doesn not solve Microsoft’s competitive disadvantage with Google. Rather we think it accelerates Microsoft’s desire to think outside the box and come up with a non-linear way to catch Google.

Heath Terry and Andrew Thomas, FBR Capital Markets: The lack of an up-front payment, no minimum revenue guarantee, and a revenue share that, while above average, is slightly below the +90% that larger deals command make for a lackluster deal for Yahoo!, in our opinion. The lack of any display component to the deal also seems like a missed opportunity for the company. As we see it, the only financial benefit to Yahoo! is the ability to shed the not insignificant technology costs associated with running a search engine. According to the company, this should result in an annual benefit to GAAP operating income of $500M….Restructuring these two businesses and untangling them from their existing partnerships and internal ties will be a massive organizational challenge for both companies.

Mark Mahaney, Citi Investment Research: Implications For YHOO – Positives: 1) YHOO believes deal would generate incremental $250MM in annual cash flow (17% accretive to our ’09 est)–assumptions very hard to test, but magnitude is reasonably conservative; 2) 88% TAC is higher than industry average, but as expected given deal size. Challenges: 1) No upfront payment to YHOO is a negative vs. expectations, tho guaranteed RPS provides significant backstop; 2) Lack of display advertising deal is a negative vs. expectations; & 3) Acknowledgment of YHOO’s Search technology limitations.

Todd Greenwald, Signal Hill Capital Group: The deal announced today will take a very long time to come to fruition we think, and will face several challenges–it will face regulatory hurdles given Microsoft’s antitrust history (though we’d expect it to ultimately get through given Google’s dominance). Additionally, it seems hard to fathom operationally, as it will require Yahoo’s salespeople to be selling Microsoft’s technology. Advertisers will want one point of contact (which would be Yahoo), though that point of contact won’t be entirely responsible for what they are selling–instead of bringing in an engineer from within the same building, the Yahoo salesperson may have to coordinate with a Microsoft employee up in Redmond. Not impossible, just tricky. And considering how smooth and automated the process of buying ads is on Google’s platform, this could prove to be a competitive disadvantage.

Mark May, Needham & Company: Search advertising is not a zero sum game, in our opinion. If Microsoft is able to make Yahoo! (and Microsoft) search more effective through this deal/combination, then we believe is will result in advertising spending more on the new search platform but not less on the Google platform. A more effect Yahoo!/Microsoft search platform does not mean Google search becomes less effective, and we believe there is more demand than supply for effective search marketing. The dollars will likely come from other, less effective, buckets.

Business 101 convincingly argues that most large M&A deals and partnerships are not successful. And, most large-scale Internet media M&A deals and partnerships have tended to under-perform their original promise (e.g., AOL Time Warner, Google/MySpace, etc.). Moreover, in the case of Yahoo!/Microsoft Search, you have two very different cultures and an expected 24 month transition process. The odds are stacked against this deal having a meaningfully impact on Google. And, over the next 2+ years while Yahoo! and Microsoft are trying to transition, Google will be innovating.

The Barclays analyst figures that Amazon will be generating some $700 million a year from the oversized Kindle by 2012. Overall, he says, the Kindle line will be a $3.7 billion business then.

I still think observers are underestimating the amount of effort it will take to get colleges–which move about as quickly as a DMV line at lunchtime–to adopt the Kindles. But let’s say the gadget does make headway with administrators and faculty. Who’s going to shell out $489 a pop for a gadget when that money could go to essentials—like beer.

For starters, let’s assume that the devices will see a big price drop in three years, just like every other consumer electronics device. It’s also possible that Amazon (AMZN) works out student discounts with college campuses in the same way that Apple (AAPL) used to many moons ago.

But even at $489, Anmuth argues, the Kindle DX would pay for itself in less than three years since it could (theoretically) save students $195 a year in textbook costs.

His math:

Of course, these numbers only work if you don’t have to replace your Kindle periodically because it falls victim to a beer bong or whatever else the kids are up to these days. But what do I know? I graduated from college in the pre-email days. Maybe the young people of today take exceptionally good care of their consumer electronics…

Midway through next year, Google’s $900 million, 3.5-year search advertising deal with News Corp. and MySpace expires. What are the odds that Rupert Murdoch’s social network gets anything close to that with a new contract?

Very, very low.

When News Corp. (NWS) first inked the Google deal in 2006, the pact was a huge shot in the arm for the company because it guaranteed that Murdoch would earn back the $600 million he’d spent on the site–and that was just for a small slice of its ad inventory.

But in retrospect, it’s clear that the agreement was a one-time only affair. If MySpace does get another Google deal next year, it will be at much lower terms. (News Corp. is the owner of Dow Jones, which owns this Web site.)

Barclays analyst Douglas Anmuth, who spent the weekend poking through Google’s 10-K filing, finds yet more evidence that Google (GOOG) has no intention of paying through the nose again. In 2007, he notes, Google spent $1.7 billion on guaranteed deals like the MySpace arrangement. Last year, that number dropped to $1 billion. (Click chart to enlarge.)

Anmuth, who also notes that Google has recently walked away from a distribution deal with Dell (DELL) and ceded a Verzion (VZ) deal to Microsoft (MSFT), concludes that “Google no longer sees the need to win distribution at any cost, and we also think it is internally re-evaluating its relationship with MySpace.”

Want even more data points? OK: Two years ago, Google let Microsoft win the Facebook bake-off, allowing Redmond to plunk down $240 million for an overvalued stake in the social network. And last year, Google Co-Founder Sergey Brin used the company’s earnings call to sound off about its disappointment with advertising on social networks.

Does this sound like a company itching to re-up?

This isn’t necessarily a disaster, by the way. Wall Street long ago stopped factoring in Google dollars in MySpace’s results (the unit posted flat revenues last quarter, which isn’t bad considering the rest of the online ad market). And Microsoft will certainly be interested in acquiring additional search inventory any way it can–ask the folks at Yahoo (YHOO) about that.

But without Google to help bid up the price, even Redmond won’t have to overpay for MySpace. Which means that if MySpace wants to keep bragging about its impressive growth, it’s going to have generate much more of that growth itself.

UPDATE: Here’s a response from MySpace:

“MySpace and Google have a long-standing, productive partnership on a number of levels including search advertising, our support of the Android operating system, implementation of Google Gears, and the co-development of OpenSocial. It’s extremely premature to speculate on what either company may do in 18 months.”

Here’s a taste:

AOL programming sites hit all-time high traffic numbers and marked the 21st month of consecutive year-over-year growth for unique visitors, according to the October 2008 comScore Media Metrix report. Unique visitors to AOL’s programming content sites grew 7% year-over-year to 54.3 million in October, and page views more than doubled, up 101% year-over-year to 4.2 billion. Engagement (total minutes) grew 51% year-over-year in October. Total minutes reached an all-time high on AOL.com, growing 27% year-over-year. Additionally, AOL.com page views grew 27%, and unique visitors and total visitors were up 9%, year-over-year, as the site further opened up to third-party content, services and features….”

Etc. ?In the old days, like last spring, this kind of AOL boasting would make competitors at Yahoo (YHOO) quiver with anger, because the Yahoo guys thought that the AOL guys were using legal but sneaky tricks to inflate traffic. Now it’s hard to imagine anyone at Yahoo getting too amped about this stuff, mostly because the people who were most passionate have left.

In any case, the real issue for AOL isn’t traffic. It’s how much that traffic is worth. And those numbers are not so good.

Barclay’s Doug Anmuth, who is covering AOL parent company Time Warner (TWX), sends out his own note this morning, which points out that while AOL’s page views increased 14 percent during the last quarter, overall ad revenue dropped six percent, and display ads at AOL’s own sites dropped 15.4 percent.

His conclusion? “Monetization of non-guaranteed inventory and challenges around Platform A continue to be an issue.” Translation: Doesn’t matter how much traffic you have, if you can’t sell it.

And those problems aren’t going away. Anmuth projects that AOL ad revenue will drop another 4.4 percent in 2009. That’s a projection some might find optimistic.

[Image Credit: Laffy4k]

Those remarks promptly shaved 5.46 percent off of Google’s stock, sending its share price down to $311.75, a three-year low.

Of course, Google’s 10-Q, which was filed on Nov. 7, said pretty much the same thing, though it didn’t have quite the same effect on the company’s share price.

As result of the continued disruptions in the global financial markets, worldwide economic conditions and their impact on levels of consumer spending have recently deteriorated in many countries and regions. Any decreases in or delays in advertising spending due to general economic conditions could reduce our revenues or negatively impact our ability to grow our revenues.”

All true. But a lousy economy is a lousy economy, and even Google (GOOG) isn’t impervious. So says Barclay analyst Douglas Anmuth, who has just cut his estimates for the search giant. He says revenue for the last quarter of the year will be flat compared to the same period in 2007; he had previously predicted growth of 3.4 percent. Next year, revenue will grow 13.2 percent, Anmuth says, down from his early forecast of 18.5 percent.

Anmuth’s reasoning is straightforward: Advertisers do, in fact, like search ads. But consumers are spending less online, which makes their clicks worth less, which is pulling down prices at Google.

That dovetails with new data from online monitor comScore (SCOR), which says that online shopping has “fallen off a cliff” and will be lucky to grow between six percent and 10 percent this quarter. MediaPost:

Year-to-date, comScore says, online sales have grown 10% to $158 billion–compared to 17% last year, 20% in 2006, and 22% in 2005. Just this year, it has plunged from 19% in the first quarter, 13% in the second, and 9% in the third. Excluding travel, the drop is even steeper, falling to just 5% in September.”

Anmuth’s note knocked down Google shares to a three-year low of $311.75; the stock rebounded to $318.78 by the end of the day.

Barclays Capital analyst Douglas Anmuth thinks so. This morning, he cut his 2008 estimate to $1.40 from $1.56; for 2009, he drops to $1.57, from $2.06. That puts his numbers way below the Street consensus of $1.51 for this year and $1.96 for next year.

Anmuth, who has an Equal Weight rating on the stock, says the company is “one of the best franchises in the Internet sector.” But he thinks the Street hasn’t fully baked in currency headwinds and the slowing economy into their estimates for Q4 or 2009. While the grim Q4 forecast from eBay has “lowered the bar for the e-commerce sector some,” he says, Amazon’s record of outperforming its peers “could mean that hopes remain too high for this stock in the near term despite the recent selloff.”

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Anmuth says consensus numbers could come down further, ahead of Q3 results; on the other hand, he says the stock in the low $400s “should prove to be a compelling entry point.” According to Anmuth, “GOOG still appears better insulated” to macro softness than other in online advertising; it continues to gain market share “and should benefit from new search improvements and tighter cost controls.”

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The one research item of note comes from Lehman’s Douglas Anmuth, in a survey of the outlook for Internet stocks generally. Not a lot of new ground, but he did note that “certain online retailers have begun to see a pronounced slowdown,” including Blue Nile, “which despite consistently strong execution and a large market opportunity…has been negatively impacted by reduced discretionary spending on high-ticket luxury items.”

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