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Technology Stocks : Alphabet Inc. (Google)
GOOGL 329.99-0.8%3:59 PM EST
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To: Lizzie Tudor who wrote (7513)2/13/2006 6:03:35 PM
From: Trader J  Read Replies (1) of 15857
 
Like I have said before, I think they have 2-3 years for that second material rev. stream to be added, it does not have to be now. All predictions that I have seen have ad. spending to increase up to 5x through 2011. within 3 years, GOOG needs to have rolled out at least a second source to continue their growth and any price premium.

If you are long this stock or want to be long, you have to love this action. Price actions doesn't care about long term prospects and getting your favorite business model at a 33% discount to a historic level ... when the model longer term will support it is a great thing.

GOOG has little to worry about in the future of the ad. revenue space. And even click fraud, in my estimation is grossly overdone in the area of concerning. Click fraud will certainly be an issue as it is handled, but no differently than fraud in other models. It is a buzzword right now.

GOOG's biggest issue will be continued shrinking of the gap if they can't roll out a 2nd rev. source ... over time. Personally, I feel that MSFT and YHOO will be in bed together VERY soon. If that happens, GOOG will be in a war in that space.

Note, however, that any MSFT/YHOO partnership just increases the battle on ad space, not anything over and above that near term. GOOG is definitely working on major infrastructure to attack direct and indirect sources .... the race will be whether or not they can start showing materiality there before they start losing leverage to competitors.

YHOO may be the best play here very shortly. I am already in but looking for a good number of long shares too and have been patient.

Tj
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