11:08 GOOG Google: CNBC reports that contributing to GOOG weakness is report out yesterday showing decline in May for prices paid for keyword searches (281.31 -11.80) -Technical- -Update- CNBC cites Fathom Online (co that tracks online ad rates for advertisers) report showing that overall keyword prices fell 15% from April to May. Expectation was that cos like GOOG and YHOO (-1.8%) would be paying at least 2-3% more for keyword searches month/month. Says this report from yesterday could be something that could be concerning investors. Notes that mortgage search price is down 30% for keyword searches.
Thanks, ElCubano. A 15% change seems really big. This must be a very volatile number. I would think a 1.5% drop would be a cause for concern, let alone a 15% drop. But if it is a volatile index, then maybe it isn't a big deal. I'll have to see if I can find some historical data. Aaron Schindler Schindler Trading
Yeah, it is volatile. From fathomonline.com the past monthly changes have been +13% (Sep-Oct, 2004), then +7%, +2%, -4%, -2%, +9%, +11% for April, and now -15% for May. Fathom Online attributes much of the drop in keyword prices to a drop in mortgage companies advertising now that the Fed is increasing interest rates. Aaron Schindler Schindler Trading
12:15 GOOG Google defended at Piper Jaffray; says Fathom Online sample size too small, search pricing not down (284.90 -8.22) -Update- The cheerleaders are going to come out of the woodwork...
From The Internet Stock Blog: So asks American Technology Research analyst David Edwards about Google (ticker: GOOG) in a note to clients. His answer: Search Update: Yesterday morning, comScore released its qSearch data for April 2005. While we analyze the data cautiously due to the inherent difficulties in calculating Internet user metrics, the qSearch data suggests that the Y/Y growth in search queries continued to decline in April and overall U.S. search was also down M/M in April - this seems a bit out of sync with the market's general expectation that sequential search volume growth should be strong in Q2. Of course, this is a single data point and we are hesitant to draw too many conclusions because this is only one month of data, represents U.S. searches only, and doesn't include information on click-through rates and prices-per-click. That said, this data doesn't add to the increased expectations on the Street for the industry. GOOG: What to do here? We transitioned coverage of GOOG on May 10th when the stock was at $226. While we are firm believers in the opportunity for GOOG, we are wondering what has changed in the past month to warrant a 29% price increase. We think it is time to ask if the bubble-like excitement of the past few weeks is sustainable and whether it's time to take a bit of a victory lap. We do NOT want to be misunderstood as being negative here, we simply do not have the conviction to get incrementally bullish (driving up our estimates and price target). At the same time, our long-term optimism for the company makes it difficult to get incrementally bearish and downgrade the stock. Perhaps it is best to put it this way: if we had been given charge of a portfolio on May 10th that included GOOG, we would be lightening up, taking some profits, and locking away a 29% gain in less than a month. But, we would also be leaving some GOOG shares in the portfolio with the belief that we will be able to take profits again in the future.
15:57 GOOG Hearing rumor that GOOG will put out press release after the close to reaffirm metrics in response to Fathom data (279.66 -13.46) -Update- No confirmation of course... just passing it along.
I didnt read this entire loooong thread, so forgive me if this has already been said. It amazes me, how media, who has scolded the public for 5 years over the dot com debacle, shamelessly defends goog at this price. It really goes to show that talking heads can say anything with a straight face They really are scum That said, it can go up, after all, if it is overpriced, then why can't it become more overpriced? That's the nature of overpricing. I'd be inclined to use tight stops though, whatever I did with it. (It is kind of funny that is started dumping after it got the peak of coverage)