Google (NASDAQ: GOOG) may be the best internet company in the world. It is certainly one of the most admired. It has 65% of the U.S. search market and similar dominance throughout much of Europe. But its stock hit a three-year low Monday at $309.44.
What's that about? The analyst consensus is that the search company's revenue will grow 27% in the next quarter and the EPS will rise to $5.17 from $4.43 last year.
The answer is probably that earnings forecasts are now considered at risk for even the most dominant company in the industry.
But the market may be wrong about Google. There is a powerful case to be made that, in a recession, marketers cannot cut all of their advertising dollars. They still have to keep customers coming in. While print, TV, and internet display ads may not be effective at doing that, Google's search product has proved, time after time, it can bring in result that are better than any other medium.
Google may shock analysts. Its product may be so good and so efficient that even in a recession it is the marketing platform of last resort and the one place advertisers cannot afford to do without.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
11-11-2008 @ 10:31AM
stan said...
The old gurad on wall street is still in place. Goldman today lowered it price on GOOG from $525 to $ 475. Even with GOOG barely holding above $300 and most likely heading to $ 150 - $200 range.
But Goldman will convince many that this is the time buy. No doubt GS is advising GOOG, hold GOOG stock and just acting as wall street firms have always done, watch out for themselves, hell with the small guy. This must stop. $ 475 in what year, 2010 or 2011. Its doubtful GOOG will ever see its higher range again.
11-11-2008 @ 11:02AM
beachpaul said...
As they say in the used car business: There is An Ass for Every Seat! Google is the poster boy for Insanity on Wall St.
11-11-2008 @ 2:34PM
JIMMY-JAM said...
GOOG HAS A POWERFUL MODEL AND THE BEST ENGINEERS AROUND.IT MAY BE RECESSION PROOF-WE DONT KNOW.
THE MARKET MANTRA IS "BUY LOW" .I DONT SEE THE PROBLEM IN BUYING GOOG NOW AT THESE LEVELS.ESPECIALLY IF YOU HAVE A LONG TERM INVESTING HORIZON.