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.”

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]

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.