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Cramer: Stick With Google – Here’s Why

Wednesday, 13 Jan 2010 | 3:57 PM ET

Will Google leave China and its massive consumer market? That, along with bank CEOs testifying in Washington, was a big issue on Wall Street on Tuesday. Cramer during Wednesday’s Stop Trading! predicted what he thought was the most likely outcome.

“I’m betting it won’t happen,” the Mad Money host said.

Google had said it was considering closing shop in China because of the country’s tough Internet censorship rules and a spate of recent hacker attacks. While Cramer admitted he was “worried” about the possibility, saying that reports put the chance of it happening at 30% to 50%, he wasn’t so concerned as to recommend selling the stock.

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Baidu.com , China’s homegrown search engine, controls a bigger stake of the search market, Cramer said, so Google potential revenue losses would be less than in other countries. Not to scoff at GOOG’s business in the Middle Kingdom, of course, but right now Baidu’s the number-one company in that space. Regardless, though, Cramer was unwilling to turn on Google’s stock without a definite answer as to whether it will stay or go.

Cramer also pointed out that “Google’s been acting doggy for days,” so “it’s entirely possible that this story was out there and people had already sold the stock who were in the know.” He was quick to mention that that wouldn’t constitute insider information because the Chinese government wouldn’t qualify as an insider.

But given the recent action in GOOG, Cramer said, “I do believe that Google could be even done going down and should have been bought when it was down a lot today.”

Elsewhere in the market, Cramer again brushed off talk of so-called shadow housing inventory, which some on Wall Street expect to flood the market and hurt the sector’s recovery.

KB Home in its most recent quarter, and the other homebuilders as well, didn’t report seeing an influx of newly available properties. That’s why, Cramer said, “I don’t expect the shadow inventory to hit the market.”

Once unemployment begins to decrease, he said, home prices should start to increase.

“And this problem will go away,” Cramer said.

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