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Look for (GOOG) Google to open lower today in response to a lengthy Barron's cover story that's highly skeptical of the company's current share price, even after the recent 25% drop. Barron's Jacqueline Doherty opines:

The [GOOG] share price could well be cut in half over the next year as the Internet giant grapples with growing competition from Microsoft and Yahoo!, increased pricing pressures in its online ad sales and mounting concern about what's known as click fraud...

[T]he 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.

Doherty further notes that Google's lofty valuation invites comparisons to Dell and Microsoft in the late 90s (we know what happened to those multiples), and concern over the flattening of keyword ad price growth.

Meanwhile, Michael Rapoport in the Wall St. Journal (sub. req.) finds that a significant portion of Google's 4Q05 revenue came from a potentially non-recurring source -- high interest on cash deposits:

Fourth-quarter net interest income was $70.2 million, more than a ninefold increase from $7.4 million the year before. Figures in a recent report from research and data firm Thomson Financial suggest that gain may have accounted for more than one-fifth of Google's overall earnings growth in the quarter...

Most people wouldn't be inclined to fault a company for having so much money that its interest income looks like a business unto itself, but the issue with Google is what this means for expectations: Its rising interest income stemmed from conditions that are unlikely to recur in 2006, such as a giant stock offering last year that boosted the company's cash hoard

Source: Barron's: Google Stock Price Could Well Be Halved In Next Year (GOOG)