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Technology Stocks : Google - Moderated - Information and discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (93)	9/12/2006 4:34:35 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 348

finally some action in GOOG today. Justin Post issued a report today: Ahead of the Bell: Google SEP. 12 9:09 A.M. ET Internet search engine Google Inc. is set to increase its advertising revenue from its expansion efforts into new markets, and as advertisers turn away from spending on traditional outlets in favor of the Web, an analyst said Tuesday. Merrill Lynch analyst Justin Post in a client note reiterated a "Buy" rating on shares of Google, which generates almost all its revenue from online search advertising. "Google has unlocked the direct marketing opportunity on the Internet and we believe company's approach to solving consumer problems will create new, high margin growth products and services that will act as catalysts for the shares," wrote Post. New initiatives for the company include efforts in offline media, transaction processing, software and product licensing markets, and success in any category could drive shares higher, Post wrote. Expansion into new markets could drive "Internet advertising penetration through new consumer services, and create new opportunities in adjacent markets," he wrote. Meanwhile, the company should benefit as the increased use of DVRs, paid satellite radio subscribers and a reduction in newspaper subscribers causes advertisers to turn away from spending on traditional media outlets, he wrote. But while the company's Internet advertising share growth should continue to grow, it could slow from its 106 percent expansion in 2005, to 77 percent in 2006 and to 41 percent in 2007, wrote Post. While Google's advertising operating margins are better than other leading media company margins (such as Yahoo Inc. and Viacom Inc.), margins are set to decline due to competition, which will lead to a need for higher marketing costs, as well as increasing infrastructure and employee costs, the analyst wrote. Shares gained slightly to $385 in premarket trading on the INET electronic exchange, from their close at $384.09 Tuesday on the Nasdaq. businessweek.com