Search giant Google (GOOG) could witness a rally in its stock price amid its leadership in search advertising market and soaring adoption of its Android operating system in smartphones and tablets.

Further, increasing rate of mobile search, thanks to surging sales of smartphones, is set to bode well for Google, which recently indicated that mobile search is becoming more important to its search and display revenues.

Google expects mobile search revenues to reach around $1 billion this year at the current run rate accounting for roughly 4 percent of Google revenues. Meanwhile, mobile search queries have grown 5 times over the past couple of years.

We believe that Google will continue to build upon its lead in the search advertising market, and expect its market share to increase from around 67 percent in 2009 to 71 percent over the forecast period. However if its search business takes off faster than we anticipate, Google could potentially grow market share to 80 percent implying just about 7 percent upside to our price $632 price estimate - which is 20 percent above the current market price, stock analysis firm Trefis wrote in a note to clients.

Android, Google's mobile operating system, could be the key driver in boosting the company's share price as Google is the default search engine on Android phones.

Surveys by several research firms showed that Android is gaining momentum and becoming a potential threat to Apple's iOS, BlackBerry OS and Nokia's Symbian.

According to statistics on overall U.S. market share, Android is the single fastest-growing mobile platform. Android captured 22.7 percent of the market, compared to iPhone's 27.9 percent and Blackberry's 27.4 percent, according to a survey by Nielsen Company.

According to Gartner, Android share in the mobile phone OS market worldwide will increase from 4 percent in 2009 to 18 percent by 2010, and then to around 30 percent by 2014.

Meanwhile, location based and personalized searches are attracting more users towards Google search. For example, the user searching for car rentals will see an ad telling him or her how far it is to the users' present location and a map.

Similarly, another features such as 'click to call' enables the user to call the vendor directly by clicking on an ad link shown beside the Google search result rather than clicking through to a web site and searching for the number - helpful for popular destinations such as restaurants.

These personalized features are likely to create more clicks or in other words better click through rates, driving up the mobile revenues for Google, Trefis said.

However, there is a small bug in terms of payment system on Android that is not as smooth as that of Apple's app store, which discourages people from completing the transaction from their mobile phones.

According to The Street, eBay's Paypal is expected to be integrated with Android, making the payment process much better and this in turn is likely to boost mobile cost-per-click rates for Google as more transactions could be completed through mobile.

In this scenario, Trefis said There could be an upside of 8 percent to the $632 price estimate for Google's stock, and imply a projected price estimate of close to $680.

Meanwhile, analyst Scott Devitt at Morgan Stanley has gone a step ahead and raised Google's price target to $730, saying that the company's growth in mobile and the success of Google Instant aren't being fully appreciated.

The analyst said Google Instant, which makes searching more efficient by displaying search results as users type, could drive increased user loyalty and market share.

Devitt, in his note to clients, noted that given the rapid growth in mobile usage / penetration, he believes 'Instant' on mobile (which launched on Nov. 5th in the US) may eventually prove more important than desktop.

Shares of California-based Google, which has about $185 billion in market cap as of Dec. 6, closed Monday's regular trading session at $578.36 on Nasdaq. In the pre-market hours Tuesday, they were up $11.64 or 2.01 percent to trade at $590.

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