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Shares of Google have tumbled lately, but they should bounce back on the company’s long-term prospects.
I have my doubts. Google is still too dependent on online advertising for their revenue even with all of the efforts to diversify. The article mentioned that many "believe internet advertising is somewhat recession-resistant because it's cheaper to run ads online than in print or on television." I have my doubts about this also.
Submitted: Jan 30, 2008
Views: 467
Comments: 5
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View Article: http://www.kiplinger.com/columns/picks/archive/2008/pick0129.htm
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Comments Received:
I think most of Google's explosive growth is behind them. They've done a great job with their search-ad model but haven't shown a lot of revenue from any of their other initiatives. Ad revenue will certainly decline, even online. Big advertisers like mortgage lenders are out of the market and this could collapse prices on Google's bid model. When one advertiser pulls out, it drops prices on everyone. Lastly, Google's advertisers can pull back instantly if the economy begins to suffer, unlike longer-term ad contracts where advertisers are committed.
I may be wrong but it's possible ad revenue won't be as rosy as predicted when earnings are revealed.
Bottom line: lots of downside and limited upside with Google.
Posted: Jan 30, 2008
Agree with the above. The market is taking former high fliers down when the guide towards more conservative growth. It has already made Apple, Amazon and VMWare pay a price. Google could easily be the next shoe to drop here.
Posted: Jan 30, 2008
The shoe has already dropped at Google. It's down significantly from its high. The question is whether it can regain its part price appreciation or go down further. I think the balance of risk is negative.
Posted: Jan 30, 2008
shraz
(Unregistered)
When are they splitting? People with low money wants to invest.
Posted: Jan 30, 2008
Google is like Warren Buffet, they don't like to split.
Posted: Jan 31, 2008
