Let's start off with the good news.
Making Their Case: The Bull
Richard Fetyko, Managing Director/Internet Analyst, Merriman Curhan Ford
Fetyko says Google has seen reaccelerated growth in its second quarter earnings—the highest growth year-over-year on a relative basis. It experienced a 24% increase in revenue, from $5.52 billion to $6.82 billion. International revenues were $3.5 billion.
Despite uncertainty over Google in China, Fetyko says there is “more business to be had outside of China.” He says, overall, the China issue is priced in and reflected in the stock and estimates.
Fetyko's 12-month price target on Google is $600-$650.
Making Their Case: The Bear
Porter Bibb, Managing Partner, MediaTech Capital Partners
Between its presence in dotcom with Google.com and Gmail, and its smartphone products like the Android, it seems like Google has the 20th Century completely covered. However, even though the company has all the tech talent that exists in the universe, Bibb still poses the question, “What have they done beyond search that makes money?”
In Bibb's view, Google fails to execute diversification. Sure, it taps into advertising venues with radio, TV, and print campaigns, but “nobody bought it.” Bibb says the company also is not making money on YouTube. And, when faced with stiff competition from Facebook, Bibb believes the soon-to-be-launched GoogleMe certainly has its challenges.
Crystal Lau contributed to this article.
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