Gosh, this Google thing could work out after all. Now that the company’s stock is pushing through all-time highs at $591, I wonder where all the Google bears are that were besieging me a month or two ago when I called for GOOG to hit $1000 within eighteen months?
Anyway, The current catalyst is optimism about Q3 results, with at least one analyst now pushing the idea of double-digit sequential growth, a fairly staggering thought given the company’s $184.5-billion market cap.
Rev growth specifics aside, I do think Google is going to outperform this quarter. The thesis, in part, is because of weakness in the overall ad market. Yes, you heard me right, weakness not strength.
Why weakness? Well, with overall ad spending under pressure, online ad spending is becoming a refuge. Advertisers are increasing their allocation to online, largely in pursuit of shifting audiences, but also because online is seen as a a more defensible buy, with it more obvious whether you are getting a return on your marketing investment.
In a hurting ad market, the medium that will do best is the medium that best allows execs to have plausible deniability for their marketing spend, and that’s now online, not offline.