Google Inc (NASDAQ:GOOG) and Yahoo! Inc. (NASDAQ:YHOO) will both release their December quarter earnings reports next week.

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Google reports earnings Jan. 30

RBC Capital analyst Mark S. Mahaney and his team call Google Inc (NASDAQ:GOOG) their “best play on Online Advertising. They cite the company’s dominant market share in search and strong share in display. In addition, they call it their “single biggest derivative play” in their 2014 Internet Growth Factors. They also say Google’s YouTube and Enterprise assets are “under-appreciated,” that the company has an “excellent” management team and a “very good” track record in innovation.

The analysts are expecting Google Inc (NASDAQ:GOOG) to report non- GAAP earnings of $11.76 per share, which is lower than consensus at $12.24 per share. They believe the company’s consolidated net revenue will be $13.2 billion for the December quarter, which is also under Wall Street estimates of $13.4 billion. They expect Google to report core net revenue of $11.9 billion, which again is slightly below Wall Street, which is at $12 billion. They project core Google non-GAAP operating income of $5.2 billion, which is also a bit under consensus.

The RBC team said they’ll be looking for a few key items in Google Inc (NASDAQ:GOOG)’s earnings this time around. They expect the recent trends of acceleration in paid click growth and falling cost per click to continue, partially because of the transition to the Enhanced Campaigns platform. They also want to see margin expansion continue, as the third quarter was the first time Google posted a sequential expansion since 2011.

In addition, they note that Motorola Mobility’s results have been dragging on Google since the company acquired it in 2012, so they would like to see those results bottom out over the next few quarters as Google introduces its own products. And finally, they would like to see growth in core Google organic revenue continue. This segment’s organic revenue has grown more than 20% over the last 15 quarters, which they say is an impressive track record for a company with a more than $50 billion run rate.

They said this could be the year when Google Inc (NASDAQ:GOOG) posts acceleration in revenue growth. So while they have a $1,300 per share price target, they see an upside scenario to $1,550. The analysts continue to rate Google as Outperform.

Yahoo reports Jan. 28

Yahoo! Inc. (NASDAQ:YHOO) is one of the biggest outliers in the Internet group followed by the RBC team in terms of share price, as it’s trading at nearly 12 turns above its historical average. Nonetheless, the analysts have an Outperform rating on Yahoo as well, along with a $44 per share price target.

They’re expecting Yahoo! Inc. (NASDAQ:YHOO) to report net revenue of $1.21 billion, EBITDA of $411 million and non-GAAP earnings per share of 40 cents. Those numbers are in the middle of the company’s guidance for the fourth quarter.

Based on intra-quarter data points, the RBC team reports that Yahoo! Inc. (NASDAQ:YHOO)’s share of the U.S. desktop search queries was fairly stable, declining just 10 basis points sequentially, although it is now down 100 basis points year over year. However, comScore data suggests that the company’s engagement trends are improving as Yahoo! page views per visitor and minutes per visitor increased year over year in both October and November. This is the first time they have seen this since they started tracking the data.

Alibaba, in which Yahoo! Inc. (NASDAQ:YHOO) has a significant stake), saw strong sales on Chinese Singles’ Day, which is equivalent to Cyber Monday in the U.S. The Chinese online retailer reported having $5.7 billion in transactions on that shopping day. In addition, the RBC analysts note that although Yahoo’s acqui-hire pace is slowing, the companies it does acquire are sure to play a major role in the future of the company.

Looking ahead to Yahoo! Inc. (NASDAQ:YHOO)’s earnings report, Alibaba’s results will play a major role because the online retailer could make up half or more of Yahoo’s share value. Search metrics are also important, and RBC expects to see continued decline in pay per clicks because of the shift to mobile. In display, they expect to see continued pressure on the number of ads sold and the pricing of those ads. The analysts will also be looking for news about Tumblr monetization.