Google Stock Set To “Sell” Due To Facebook – Down 21 Percent in 2010

SecondShares’ Lou Kerner was on CNBC yesterday after he initiated Google with an ‘underperform,’ making him just the second analyst to put a ‘sell’ on the stock. Kerner put a price target on Google at just $525.

According to Kerner, Google is making the vast majority of its revenue on a pay-per-click basis to drive traffic to web sites”, and “given its huge base of over 500 million members, the majority of which log on every day, Facebook is already driving more traffic to some leading web sites and it is poised to dramatically grow its share of traffic generation just based on clicks from user news feeds.”

According to CNBC, Google shares are down 21 percent this year, underperforming competitor Yahoo, which is down 17 percent. Yahoo was downgraded to ‘hold’ today by BGC Financial analyst Colin Gillis, who cited flat display advertising in June.

Lou Kerner is a partner at SecondShares and an analyst at Wedbush Securities.

This entry was posted in Facebook, Google and tagged , , . Bookmark the permalink.

One Response to Google Stock Set To “Sell” Due To Facebook – Down 21 Percent in 2010

  1. moto says:

    Kerner’s logic has a serious flaw. In terms of web traffic, Facebook is a big threat to Google. However, it is the Pay-per-click rate and the ad effect that counts. I am not sure whether Kerner is aware, but roughly 50% of the time advertising doesn’t work. In other words, Google’s advertising effect is much greater than Facebook, simply because people ARE more willing to click on Ads on Google (especially the links indicate the results the users are searching). On the other hand, Facebook’s revenue generating power is still blurry. We know it’s got tons of users, and we know it has some ads displayed and some third party applications such as games, etc. The million dollar question is, though, how is Facebook really making money, and how much money is Facebook making when compared with Google.

    Let’s not forget, Google serves all types of end users; the demographic pretty much covers anyone who uses a computer or does search on a browser. Facebook serves… hmmm… according to the statistics, users “who care less about privacy, or who don’t have better things to do, or who are not old-fart enough to “miss” such fad or trend or hype”…

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>