Wednesday, November 10, 2004

CS First Boston Raises Google Price Target

CS First Boston raised its price target for Google (GOOG) this morning from $177 to $225. Since Google is a high growth company, they say 'valuation is very sensitive to small changes in the growth rate and model assumptions.'

They do note the second Google lock up expires Nov. 18th. 39 million shares are available for sale on that date. There may be some volatility in the stock price around Nov. 17th.

Google is default start page for Firefox 1.0

Mozilla released version 1.0 of Firefox, the open source competitor of Internet Explorer, yesterday. The default start page for the browser is a customized version of the Google home page. This should drive some incremental search traffic for Google.

Microsoft to introduce new search engine

The New York Times reports that Microsoft will introduce its new search engine tomorrow (Nov. 17th.) This is a long awaited competitor to Yahoo! and Google.

The Wall Street Journal reports that according to a Yahoo! spokeswoman, Overture's (a subsidiary of Yahoo!) contract to provide sponsored search ads is unaffected by this search preview. Undoubtedly that will change eventually. Even if Microsoft captures more search business, they will still be sharing the revenue with Yahoo! as long as Overture continues to be the ad provider. Microsoft will have to sell its own ads to get a return on the investment its making in improving its search engine.