Google's Analyst Meeting: What to Expect
What should investors expect from Google’s analyst meeting on Wednesday?
Martin Pyykkonen, Global Crown Capital senior media and Internet analyst, joined “Squawk Box” to offer his insights on the meeting, which begins at 1 pm New York time.
Pyykkonen said analysts should be looking closely at the search-engine firm’s pricing environment.
"Pricing alone has accounted for one quarter of the topline growth over the past two to three years," he said.
“At some point, they’ll hit finite limits. But I don’t think that’s going to happen just yet,” said the analyst.
Pyykkonen points to Google’s massive hiring wave in recent quarters as proof that the firm is planning advances in directions other than search – which does not require a large workforce. However, he disputed industry rumors that the firm is planning a “Gphone” to rival Apple’s high-profile iPhone.
“I don’t think it makes sense,” he said, maintaining that Google’s business model is better suited to advances in enterprise technology, squaring off against suppliers of enterprise tech, such as Microsoft and Sun Microsystems.
Meanwhile, a Wall Street Journal report indicates that social-networking site Facebook is close to choosing between Google and Microsoft to sell Facebook ads outside the U.S. And the winner of the global ad sales deal is expected to buy a minority stake in Facebook. The New York Post reports that Facebook is expected to decide the winner within the next two days.
Pyykkonen saiod that among its e-commerce peers, Google is “the only one that could afford [Facebook],” he says -- but he does not expect an announcement of a bid today.
And he looks to Orkit, the social site Google purchased a few years ago, as the best starting point. “It makes more sense to grow it organically” than to acquire an expensive, ready-made social site and then integrate it into Google, Pyykkonen said.
The analyst says Google stock is “reasonably priced” and he expects it to reach $800.