In relation to the comments I want to provide an approach using biblatex.
First of all I changed the definition of the output of authors and replace the name stored in \highlightname with the initials saved in the macro \shortform.
The main idea is inspired by P. Lehmann.
\documentclass{article}
\usepackage[utf8]{inputenc}
\usepackage{filecontents}
\begin{filecontents}{\jobname.bib}
@Book{test1,
author = {Goossens, Michel and Mittelbach, Frank
and Samarin, Alexander},
title = {The LaTeX Companion},
publisher = {Addison-Wesley},
location = {Reading, Mass.},
year = {1994},
}
@Book{test2,
author = {Mittelbach, Frank and Goossens, Michel
and Samarin, Alexander},
title = {The LaTeX Companion},
publisher = {Addison-Wesley},
location = {Reading, Mass.},
year = {1994},
}
@Book{test3,
author = {Mittelbach, Frank and Samarin, Alexander
and Goossens, Michel},
title = {The LaTeX Companion},
publisher = {Addison-Wesley},
location = {Reading, Mass.},
year = {1994},
}
\end{filecontents}
\usepackage[style=authoryear,minnames=8,maxnames=10]{biblatex}
\addbibresource{\jobname.bib}
\newcommand*{\mknamesignature}[5]{\def#1{#2|#3|#4|#5}}
\mknamesignature{\highlightname}{Goossens}{Michel}{}{}
\def\shortform{MG}
\makeatletter
\DeclareNameFormat{labelname}{%
\begingroup
\mknamesignature{\currentsignature}{#1}{#3}{#5}{#7}%
\ifdefequal{\highlightname}{\currentsignature}%
{\let\mkbibnamefirst=\@gobble%
\def\mkbibnamelast{\shortform\@gobble}%
\let\mkbibnameprefix=\@gobble%
\let\mkbibnameaffix=\@gobble}%
{}%
\ifnum\value{listcount}=1\relax
\usebibmacro{name:last-first}{#1}{#3}{#5}{#7}%
\ifblank{#3#5}
{}
{\usebibmacro{name:revsdelim}}%
\else
\usebibmacro{name:first-last}{#1}{#3}{#5}{#7}%
\fi
% Ende der Gruppe
\endgroup
\usebibmacro{name:andothers}}
\makeatother
\begin{document}
Test
\cite{test1}
\cite{test2}
\cite{test3}
\printbibliography
\end{document}

EDIT 1: Fixed spacing problem
.bblfile when the presentation is complete and the.bblfile is in its definitive form. Otherwise it would be necessary to act on the.bibfile. – egreg Feb 11 '12 at 15:06