Last quarter, Google delivered a nice earnings beat with earnings per share (EPS) that was $.31 ahead of Wall Street’s expectations. However, Google’s shares tanked following the earnings release and have still not recovered as investors worry over Google exiting the China market. We are expecting another earnings beat this quarter, and we are hopeful that Google’s stock price will jump on the positive earnings news.

The fourth quarter saw average cost per click (CPC) increase by 5% and we expect to see similar gains in the first quarter. Youtube began showing considerable strength in the fourth quarter and it appears that trend has continued in the first quarter with their homepage inventory completely sold out.

In 2009, Google’s shares more than doubled as gross revenues grew 17%. GOOG’s strong stock performance has not carried over into 2010 though, with the stock declining 8% since the beginning of the year.

The current Wall Street consensus estimates are for revenues of $4.93 billion and EPS of $6.57. We at are forecasting better than expected results, with first quarter revenue of $4.98 billion and $6.74 EPS.

Google is now trading at 18x consensus 2011 EPS estimates. This is below the relative valuations of their peer group. Despite exiting the China market, Google appears to have tremendous growth opportunities over the next few years and we would expect its stock price to return to its pre-recession levels.

On March 4th, Move reported fourth quarter results that exceed Wall Street’s expectations. Fourth quarter revenue came in at $49.6 million, ahead of both the company’s guidance and the Street’s consensus estimates. Move’s stock jumped 16% following the news.

Move also updated their full year 2010 guidance and now expects revenue of $186 – $192 million and an adjusted EBITDA margin of 10%.

Despite Move’s 39% run-up this month, all is not rosy for the online real estate company. Revenue declined 14% in the fourth quarter and even at the high end of their guidance, revenues are expected to fall another 10% in 2010. A challenging real estate environment continues to present strong headwinds for the company.

Yahoo
CEO Carol Bartz recently appeared on CNBC and emphasized that Yahoo is “marching forward” and that she will prove it. In addition, EVP Hilary Schneider indicated at the Goldman Sachs technology conference that due to quicker-than-expected regulatory approval on the Microsoft (MSFT: 26.03 0.00%) deal, Yahoo now will receive some “unexpected benefits” in the first quarter. These “unexpected” reimbursements when taken along with Carol Bartz’s comments seem to point to strong first quarter results.

AOL
Meanwhile, AOL seems to be struggling in it’s first full quarter as a public company. On their fourth quarter earnings call, AOL provided Q1 guidance for flat year/year domestic advertising revenue. However, in their recent 10-K filing AOL now anticipates a decline in their first quarter domestic ad revenues.

Here is the specific text from the company’s 10-K filing:

…based on current information, we believe domestic display advertising revenues will decline in the first quarter of 2010 as compared to the first quarter of 2009 as a result of our advertising sales organization restructuring which resulted in the reassignment of a majority of our advertising accounts, significantly lower monetization of AOL Properties through our Third Party Network and an approximate $5 million reduction (which represents an approximate 40% year-over-year decline) in advertising revenue related to legacy agreements on certain AOL Properties.

Since the beginning of 2010, AOL shares have been outperforming Yahoo with AOL gaining 5.3% while Yahoo stock slid 7.2%. However, we would expect those performances to reverse over the next few weeks.

IAC Interactive
While many investors want to value IAC Interactive (IACI: 25.03 0.00%) simply on their cash balances, savvy investors have been enjoying the ride in 2010. Since the beginning of the year, IAC’s shares have gained 12.6% and closed Monday at $23.07.

Web MD
Following on last year’s 63% gain, WebMD’s (WBMD: 46.11 0.00%) stock is off to another hot start this year. The health content network has seen their shares gain another 13.9% since the beginning of 2010 and closed at a new 52-week of $43.84.

Netflix
The Netflix story never seems to grow old. After gaining 84% in 2009, the internet stock is up an amazing 26.5% already in 2010. The company continues to outperform Wall Street’s expectations and investors may be eyeing double-digits soon.

Priceline
In 2009, Priceline’s (PCLN: 224.19 0.00%) stock nearly tripled in price. However, investors aren’t taking profits just yet. The stock is up 9.2% again in 2010 and today closed at a new 52-week high of $238.54.

Shutterfly
Finally we come to Shutterfly (SFLY: 24.82 0.00%) which today closed at $20.23. The internet stock suffered through a 78% drop in their share price in 2008. However, they rewarded investors with an amazing 155% return in 2009 and their shares are up 13.6% already in 2010.

With the exception of IAC Interactive, these internet stocks have delivered some very gaudy returns for investors over the last year. However, as the economy continues to improve and money flows back into the stock market, it appears as though they may still have room to run.

Of the 38 internet stocks that we follow, 22 stocks posted gains for the month versus only 15 losers (eBay (EBAY: 20.77 0.00%) was unchanged for the month).

Here is a look at the performances of the top internet stocks in February.

Open Table
Open Table shares soared 37% in February and were by far the top internet stock of the month. The stock jumped 23% following better than expected earnings results on February 9th and has been trending higher ever since.

Shutterfly
Shutterfly (SFLY: 24.82 0.00%) stock gained 21.3% for the month. The company handily beat fourth quarter consensus earnings estimates and provided 2010 guidance that was above Wall Street’s expectations.

zipRealty
zipRealty’s 20.2% increase last month is positive news for real estate investors. ZIPR’s big gain can’t be attributed to company specific events, but rather in increasing optimism that the housing market is beginning to recover.

Drugstore.com
Solid earnings results on February 9th sent Drugstore.com’s (DSCM: 2.73 0.00%) shares up 16% the next day and drove the stocks impressive monthly performance.

Priceline
Over the past few months, few stocks have been hotter than Priceline (PCLN: 224.19 0.00%). So it’s probably no surprise that the internet travel stock was one of February’s top performers. Priceline’s stock jumped 16% for the month following tremendous quarterly results that saw their gross bookings accelerate to 53% y/y growth.

LoopNet (LOOP: 11.92 0.00%)
LoopNet operates an online marketplace for commercial real estate.
2008 Revenue: $86 million

InfoSpace (INSP: 7.99 0.00%)
InfoSpace offers search service through its website such as Dogpile.com, WebCrawler.com and MetaCrawler.com
2008 Revenue: $157 million

United Online (UNTD: 6.42 0.00%)
United Online operates in three distinct segments: floral products through their FTD segment, a subscription social network in Classmates.com, and dial-up internet services through Net Zero and Juno.
2008 Revenue: $669 million

zipRealty (ZIPR: 2.70 0.00%)
zipRealty is an online real estate brokerage focusing on the residential market.
FY 2009 Revenue: $107 million

Monster Worldwide (MWW: 13.33 0.00%)
Monster Worldwide is a global online recruitment service that also operates an online advertising network.
2008 Revenue: $1.35 billion

Netflix (NFLX: 98.02 0.00%)
Netflix provides subscription customers with access to online movie rentals.
2008 Revenue: $1.36 billion

Stamps.com (STMP: 10.49 0.00%)
Stamps.com provides online postage solutions to individuals and small businesses.
2008 Revenue: $95 million

eHealth (EHTH: 11.14 0.00%)
eHealth is an online insurance agency providing health insurance quotes.
2008 Revenue: $112 million

Answers (ANSW: 7.84 0.00%)
Answers Corp operates online answers websites Answers.com and WikisAnswers.com.
2008 Revenue: $14 million

Internet Brands (INET: 10.30 0.00%)
Internet Brands is an online media company operating and developing an ever-growing portfolio of vertical content websites.
2008 Revenue: $104 million

The Street (TSCM: 3.15 0.00%)
The Street is a financial media company operating a network of financial websites including their flagship website TheStreet.com
2008 Revenue: $72 million

Web MD (WBMD: 46.11 0.00%)
Web MD operates a network of websites that offer health information to individual consumers and healthcare practitioners.
FY 2009 Revenue: $383 million

The Knot (KNOT: 7.95 0.00%)
The Knot operates a network of wedding related websites
2008 Revenue: $104 million

TravelZoo (TZOO: 15.74 0.00%)
TravelZoo is an online media company that publishes a weekly travel newsletter to over 17 million subscribers
2008 Revenue: $81 million

Tech Target (TTGT: 5.86 0.00%)
Tech Target operates a portfolio of technology related websites.
2008 Revenue: $105 million

Marchex (MCHX: 4.69 0.00%)
Marchex operates a vast network of websites delivering local content.
2008 Revenue: $146 million

You may have noticed some prominent exclusions within our internet content category with online advertising giants Google (GOOG: 484.99 0.00%) and Yahoo (YHOO: 13.76 0.00%) not being mentioned at all. However, internet stocks with market caps of $5 billion or greater are included in our large cap internet stock category as we believe that the stock market evaluates those companies slightly differently.

Blue Nile (NILE: 50.00 0.00%)
Blue Nile is an online jewelry retailer specializing in diamond engagement rings.
2008 Revenue: $295 million

Bidz (BIDZ: 1.48 0.00%)
Bidz operates an online auction site that specializes in jewelry.
2008 Revenue: $207 million

Shutterfly (SFLY: 24.82 0.00%)
Shutterfly specializes in photography & related items.
2008 Revenue: $213 million

Overstock (OSTK: 19.73 0.00%)
Overstock.com is an online discount retailer that focuses on brand name merchandise.
2008 Revenue: $834 million

1-800 Flowers (FLWS: 2.24 0.00%)
1-800-Flowers.com operates as a gift retailer specializing in flowers.
FY 2009 Revenue: $714 million

Drugstore.com (DSCM: 2.73 0.00%)
Drugstore.com is an online retailer specializing in health and other household products.
2008 Revenue: $367 million

US Auto Parts (PRTS: 6.43 0.00%)
US Auto Parts operates a network of online retail websites specializing in aftermarket auto parts.
2008 Revenue: $153 million

Orbitz (OWW: 4.80 0.00%)
Orbitz operates a portfolio of online travel retail websites.
2008 Revenue: $870 million

Vista Print (VPRT: 31.99 0.00%)
Vista Print is an online retailer of marketing and small business print products.
FY 2009 Revenue: $516 million

You may have noticed some prominent exclusions within our ecommerce category with ecommerce giants Amazon.com (AMZN: 116.86 0.00%) and eBay (EBAY: 20.77 0.00%) not being mentioned at all. However, internet stocks with market caps of $5 billion or greater are included in our large cap internet stock category as we believe that the stock market evaluates those companies slightly differently.