Wall Street Shows Lust for Google and Caution For Yahoo.
Search Engines Continue To Lead Technology Stock Plays.
Internet earnings season shifted into high gear this month with the major search engines drawing the largest spotlights. Yahoo the once proud grandfather of keyword search is being viewed with caution and the ever elite Google guys are drawing sheer lust with daily run-ups topping $600 per share. Some investment analysts (still unsure of the keyword search space) are happy plodding slowing along as they increase their stakes with Yahoo and continue to look for optimistic signs of its ability to catch up with Google’s keyword advertising strength.
Deutsche Bank analysts predict Yahoo results to be in-line with expectations or just slightly below as they place a humble and down $24 target on Yahoo shares which is nearly 15% lower than Yahoo's recent share price trends of $27+. Other high rolling investment firms clad in french cuff shirts and designer cufflinks expect Yahoo’s earnings to drive and support a confident $30 target, suggesting that Yahoo stock will rise nearly 8% during the next year.
Yahoo shares are up 9% so far in 2007, and the company has been through some significant changes with the departure of former CEO Terry Semel, who was replaced in June by co-founder Jerry Yang. The Yahoo Panama advertising platform was launched to help the former king of search better compete with arch rival and long-time Yang friends Google for the coveted search-advertising dollars. Recent speculation and hints by Jerry Yang that Yahoo will be sold off in chunks with AT&T gobbling up many profitable parcels have also helped Yahoo prop their share prices up. Some market analysts including a leading broker from a flint hospital also view Yahoo as more successful than Google in getting advertisers to spend more money on search ads quarter-over-quarter. Those hidden Yahoo Pay Per Click account re-charges might drive short-term results however they also spike advertisers frustration levels and push quality PPC accounts away from Yahoo toward Google and MSN.
Speaking of Google the lust for GOOG is running huge on the street, Goldman Sachs analysts deemed Google as their top pick in the Internet industry and view Google and keyword search as the primary driver of the Internet stock sector that is up nearly 50% year-to-date. “We continue to view the Internet sector as our favorite sector across communications, media and entertainment given the benefits of strong secular growth trends and significant international exposure, both of which offset a U.S. slowdown, especially in newspaper, radio, and television advertising.”
One analyst added “The performance-based nature of keyword search advertising and its ability for direct response lead to higher portions of advertising budgets being allocated to the major search engines, especially Google AdWords. We do have a concern with one aspect of Pay Per Click Search Advertising: Click Fraud.”
In researching the numbers "we find few companies as well positioned as Google.” Google Investors are looking for new updates on Google's continuing transformation of YouTube and quality of overlay advertising within the online video space.
