Google Shares Pop 4.47% on Citigroup Upgrade
Citigroup analyst Mark Mahaney upgraded the stock’s rating from Neutral to Buy, citing a lower threat posed by Facebook than from earlier this year.
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In April, Mahaney downgraded Google, noting “increased regulatory risks, concerns over very aggressive op-ex spend, and the rising influence of Facebook.” He attributed his change of heart by noting that since the spring,
“Google has sustained 28% organic revenue growth” and “has begun to show signs of margin stabilization.”
Meanwhile, Mahaney believes that Facebook will most likely continue doing business as usual by influencing more traffic on the Internet, and after talking with the company’s management, he believes that it “has no intention of getting into the search business.”
Creative Strategies Inc. analyst Tim Bajarin jumped into the conversation and noted that speculation that Facebook may jump into the search market and with its size, become a challenger to Google (NASDAQ:GOOG).
Bajarin said in an interview, “The was strong thought that Facebook was going to the enter the market for search. We have not seen any indication of that. Having said that, there’s nothing that precludes them for doing that.”
Meanwhile Google is still trying to compete with Facebook in the social media arena through Google+; however, it’s not anywhere near knocking Facebook off its throne.