Is Google headed to $700?
Posted
Oct 05 2007, 11:14 AM
by
Kim Peterson
Rating:
It won't be long before people start talking about Google shares hitting $1,000. Bear Stearns analyst Robert Peck said today Google shares could reach $625 this year and $700 next year.
"Google's efforts in online video, radio and print, have added a layer of value that is absent from its competitor's portfolio of offerings and which has the potential to yield significant financial rewards," Peck said.
Also today, Todd Greenwald of Nollenger Capital raised his price target on the stock to $650, citing strength in Europe. No one seems to be worried about Google getting hurt by any problems in mortgage advertising right now.
Fueling these flames is news that Google owned 40% of the U.S. Internet advertising market this year. According to a report out this week by the Interactive Advertising Bureau, Internet advertising revenue in the U.S. was $9.99 billion in the first half of this year. (Full PDF report here).
Google's U.S. revenue for the first half of the year was roughly $3.98 billion ($2.03 billion in Q2 and 1.95 billion in Q1.) About 99% of Google's revenue comes from advertising. HipMojo.com runs some similar calculations here.
Google's lock on the U.S. market is growing. For the first half of 2006, Google's U.S. revenue was $2.74 billion, or 35% of the $7.9 billion in U.S. Internet advertising revenue.
So yeah, it's not too far-fetched to imagine people speculating about a $1,000 share price. Leave it to Henry Blodget to take that a step further; he got tongues wagging this week when he suggested Google stock could reach $2,000 a share in 10 years.
