I've nailed down my Halloween costume. I'm going to be a
devil's advocate. Trick or treat, Pollyanna!
To get warmed up, I may as well go for a little target
practice on
Google (Nasdaq: GOOG). The dot-com bellwether
reports its third-quarter results tomorrow night, and
everyone seems to be banking on a winning performance.
After all, Google has been growing during the industry's
downturn as lesser online advertising players
Yahoo! (Nasdaq: YHOO),
Microsoft (Nasdaq: MSFT),
ValueClick (Nasdaq: VCLK), and
Time Warner 's (NYSE: TWX) AOL go the other
direction.
Google doesn't provide profit guidance, so it's
commendable that it stared down the recession and surpassed
profit expectations in each of the four previous quarters.
Why would the positive trend falter now that the economy is
showing signs of life?
Well, a stumble
couldhappen.
Analysts are expecting a record quarter out of Google --
and why not? Paid search has thrived as advertisers migrate
to the platform that offers immediate accountability.
However, paid search may not always be the superior marketing
platform. Click fraud is a concern, as rivals or third-party
publishers can milk budgets dry without delivering real
leads. Sponsors can also learn to bid smarter.
If you don't think paid search is vulnerable, ask yourself
why Google is beefing up its graphical ads. From YouTube to
its
$3.1 billion deal for DoubleClick, Big G seems to be
telegraphing a
broader online advertising strategy. Is this a logical
extension or the first signs of desperation?
Furthermore, am I bold enough to predict that Google will
disappoint investors tomorrow night? Sorry. I'm not that
crazy. Google rocks. That devil's advocate costume doesn't
even come in my size.
Google's actions can't be dismissed, and shareholders
can't bank on the paid-search model forever. Tomorrow,
though, a bullish stance on Google is a good bet.
This article was originally published as
What If Google Blows It?on
Fool.com
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