If I were a Google executive, I’d just stop reading any analysts’ assessments of the company. In just a few short weeks, Google has gone from hero to has-been, if two divergent analyst reports are any indication. First, right after the New Year, Piper Jaffray analyst Safa Rashtchy raised the one-year target price on Google to over $600/share, sparking all kinds of crazy speculation ($1,000? $2,000? $3,000?) on how just how high Google’s stock can go.
Rashtchy’s recommendation: buy.
Now S&P’s Scott Kessler is saying Google is out of steam. Kessler warns of Google’s “ABCs,” which he says pose a risk to Google’s growth. A stands for “absence of material diversification,” meaning that Google’s revenues are 99% dependent on click advertising. B stands for “building competition,” which means that Google is facing stiffer rivals, such as Yahoo, in the search market.
And C stands for “click-fraud.” Kessler thinks that click-fraud on Google is substantial and once the amount of fraud becomes known, it could hurt Google’s shares.
Kessler’s recommendation? Sell.
Oh brother.
Cynthia Brumfield at 1:23 PM|Comments(0)
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