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Technology Stocks : Alphabet Inc. (Google) -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (2806)	8/18/2005 8:05:42 PM
From: William F. Wager, Jr.	Respond to of 15851

Analysts React: Google Offering................................ There was a lot of speculation that Google was interested in buying Baidu prior to its IPO. We have no insight into this, but note that it, in our view, would be a good strategic fit. However, Google could issue shares for an acquisition of this type rather than raising the cash. In addition, it is also unlikely they could make an unsolicited offer since Baidu has two classes of shares and only a small portion of Baidu shares are currently publicly traded, so they would still need to negotiate. Other names that have been mentioned include Tivo and Infospace. … Overall, it is unclear what they will need the cash for…." -- Merrill Lynch analyst Lauren Rich Fine, who rates Google "neutral" * * * Technology firms with rising share prices commonly issue shares for acquisitions, so we find it interesting that Google will sell shares for cash before announcing an acquisition. We expect Google to purchase companies building next-generation search technologies, such as in video or mobile search. Some emerging search companies include Blinkx, TVEyes, and Convera. -- Guzman analyst Philip Remek, who has maintained his "underperform" rating and $206 price target on Google * * * We continue to believe that the company will post hyper-growth rates in the near-term, which will in turn lead to further upside in the shares. Therefore, we would use any weakness in the shares as a buying opportunity. In our opinion, an investment in Google is, in effect, an ownership stake in a company with maximum exposure to the online advertising market's fastest-growing format. -- Prudential Equity Group's Mark J. Rowen, who reiterated his "overweight" rating and $400 price target on Google * * * Acquisitions in China and Russia make sense given that these are underdeveloped countries for Google, but we would be surprised to see any one deal as large as $4 billion. As it relates to technology acquisitions, we don not know of any company that has a unique technology with a value anywhere near $1 billion. Therefore, we believe any technology acquisitions would be below $1 billion and likely less than $500 million. … Investors have asked if we thought AOL was a potential target. We believe there is very little strategic or financial merit to an investment in AOL by Google (there is for other companies, but not for Google in our view). Thus, we assign close to zero probability to this scenario. -- Goldman Sachs analyst Anthony Noto, who has an "outperform" on Google * * * Given Yahoo's $1 billion purchase of a stake in Alibaba, and Baidu's IPO, we believe that the minimum cash required to compete globally on the Internet is rising. Assuming that the total proceeds of the offering … are added to Google's balance sheet, the company will have $6.8 billion in cash and equivalents on its books. We believe this cash balance could allow the company increased flexibility to consider large [$1 billion plus] strategic acquisitions. Further, the sizeable cash balance potentially allows the company to compete aggressively against Microsoft in search: including desktop search, which Microsoft will likely include as part of Vista, as well as Microsoft's adCenter search product for advertisers (currently in beta in France and Singapore), which we expect Microsoft to roll out globally. -- Morgan Stanley analyst Mary Meeker, who rates Google "overweight" * * * • Prudential Equity Group makes a market in the shares of Google. • Merrill Lynch acts as a market maker for Google. The firm has received compensation from the company for non-investment banking services or products within the past 12 months, and expects to receive or intends to seek further compensation within the next three months. • Guzman says it doesn't make a market in the securities of Google and doesn't have an investment-banking relationship with the company, but may seek to be compensated for such activities in the future. • Goldman Sachs makes a market in the securities of Google, of which it beneficially owns 1% or more of the common equity. The firm has managed or co-managed a public offering in the past five years and received compensation from the company for investment-banking services in the past 12 months, which it also expects to receive or intends to seek in the next three months. • Morgan Stanley makes a market in the securities of Google, of which it beneficially owns 1% or more of a class of common equity securities. Within the last 12 months, the firm managed or co-managed a public offering of securities of the company and has received compensation for investment-banking services, which it also expects to receive or intends to seek in the next three months.