Google is Looking Good

Google (NASDAQ:GOOG) has been looking good, with shares growing 30 percent over the last three months. On September 24, the stock was up almost 2 percent, hitting a new all-time high and breaking the average price target of $743. Mark Mahaney of Citigroup raised his price target on the stock to $850, reiterating his “Buy” rating.

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According to eMarketer, Google is on track to beat out Facebook (NASDAQ:FB) in display ad revenue. Google will weigh in at 15.4 percent of display ad dollars, with Facebook at 14.4 percent, and Yahoo! (NASDAQ:YHOO) at 9.3 percent. The overall market for display ads is expected to grow 21.5 percent this year.

Brian Wieser, an analyst at Pivotal Research Group, said, “The stock has performed very well in recent months, suggesting that the market is coming around to seeing how durable the company’s cashflow generation will be.”

Facebook and Yahoo have both indicated that they will be looking harder at search, but Google’s massive lead in market share and advanced technology is a huge barrier. Yahoo has promised to step up its search game, but it’s difficult to see the company’s 7 percent search share as threatening despite CEO Marissa Mayer’s bold strategies. Investors will find comfort in Google as the company competently moves into mobile — Android is already a massive success — because of Google’s existing revenue streams. Facebook, on the other hand, has to move quickly or sink.

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