Investing News Blog

Tuesday, February 14, 2006

Google Stocks Drop

It seemed that Google could not make a wrong move with Wall Street, with its stock price moving higher week after week. Investors that got in on the ground floor were happy to see GOOG reach a high of $475 per share in just a couple short years, but more recently the stock has taken a pounding.
It is currently trading at around $345 (on Valentines day 06), and is still heading south. Financial analysts that previously seen no limit to the heights that Google could reach are now reconsidering their recommendations, and some are even putting out SELL recommendations!
The Google 3 are still optimistic about the future of the company, judging by the upbeat and playful interview that Time magazine had with Larry Page, Sergey Brin, and Eric Schmidt. But financial experts are now doubting the irrational exuberance that the share price has been going through lately. The Barron's business magazine recently published a critical article that predicts the company still has a lot further to fall than the 25% it has fell to in recent weeks. It mentions increased competition from cashed up competitors like Microsoft search and Yahoo, pricing pressures with online advertising, and the concerning problem of "click fraud" that is still yet to be solved..
In the Drink (Barron's article on Google)
"Fans insist that Google (ticker: GOOG) is headed to $500, maybe even $2,000. But the list of challenges the company faces is nothing short of mind-googling. As if Microsoft weren't enough, the search concern is headed for brawls with content providers like newspaper and book publishers. Phone and cable firms may also join the fray. Google's cost structure, meanwhile, is ballooning, with the company hiring thousands of new workers and mulling projects as far afield as space travel. If Google trips on even a few of the challenges, its earnings could easily disappoint." Barrons
# Internet Companies, Stock Market, Business Leaders