Catalysts Driving Google Stock

Google (GOOG) has several recent drivers that could propel the stock back to its 52 week high.

• According to the San Jose Mercury News, there is no economic slowdown on the Internet.
• According to Google's earnings call, it now makes more than 50% of its revenue from overseas. The fallling dollar gooses Google's earnings. Should Bernanke / the Fed continue to debase the currency, the earnings will continue to benefit from the exchange rates.
• The unresolved Microsoft (MSFT) dance with Yahoo (YHOO) weakens Google's competitors. A proxy fight could further hurt Microsoft and Yahoo in the short run and will likely strengthen Google's position with advertisers and investors.
• Google has recently introduced brand image ads for cellphones. The move extends Google's reach into the mobile advertising market. The move could further benefit Google in the long run in emerging markets where internet use is more prevalent on mobile phones than on laptops or desktops. Google has rolled out the service internationally, and it is available in Australia, China, France, Germany, India, Ireland, Italy, Japan, Netherlands, Russia, Spain, the UK, and the United States.
• Google has upgraded Google Finance to include more news stories and links on its home page. In addition, Google has added templates to Google Docs.
• In China, Google has entered into an agreement with China Mobile that gives Google the exclusive rights to process search queries from China Mobile's customers. The agreement will help Google in its efforts to supplant Baidu in the world's largest internet market. China currently has more than 565 mobile phone users -- more than the entire US populaiton. It further has more than 210 internet users.
• And of course, Google has major initiatives that will come to fruition in the 3rd and 4th quarters. Google Android promises to be one of the big stories during the Christmas shopping season.

Add it all up, and I find myself extremely bullish on the stock.

Disclosure: Author has a long position in GOOG

Comments

[realme]

I beleive you are right on target with your findings and forecasts. I have actually been saying the same for a while since purchasing the stock in the 600's in the 4th quarter. I forecast in addition that once the fourth quarter numbers come out in 2009, It will surpass 1000! and continue to grow. They use the same formulas for growth as Berkshire Hathaway - Look at its track record.

[Rumaz]

I agree, and add to the above (catalysts) G's initiative in green fuels, digitizing books and bio-tech (genomics).

I too bot (5) shares when it was around 680! It deffinitely hurt to see it go below 450. But I saw that as a great entry point and bot sum more (8) @ 530. Can't wait to see it hit 1000.

[Ames Tiedeman]

GOOG will be 1,000 by 2010. Earnings growth will accelerate. The analysts have numbers that do not reflect the growth ahead. The expenses that seem out-of-line such as the added employee expenses will be shrinking in the quarters to come. Stay long. Listen not to the bears, but to the bulls on this name.

[borisb]

Google beat estimates in the first quarter and after a couple of months of consolidation might be ready to move on up. :-)