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Morningstar Senior Equity Analyst Rick Summer and Zacks Stock Strategist Brian Bolan on the outlook for Google’s online advertising revenue and whet...
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-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- On -- you have a price target of 780.
It was trading a little down after hours it's now come up a little bit at 658 is the bid right now are you still bullish on that are you still sticking by your 780 target.
Yeah we're so bullish on I think we're gonna have to obviously run through some numbers here real one of the things that people are really focused on are the CPCs -- the cost per click.
And this is a real tough thing to look at an isolation because there's a lot of inventory is a lot of ad inventory at close -- that cost per click number there.
-- what do you think.
You know I think the the broader question what you really have to ask is why is this happening why are clicks higher and cost lower.
What message is Google trying to send -- trying to say to advertisers.
You can get more clicks for less dollars when you use us.
As opposed to FaceBook so if you want to sell your product if you wanna get noticed if you want people coming -- site.
You're gonna use -- search engine you -- use search engine advertising with Google as opposed to display advertising through FaceBook but.
Brian is -- a message that resonates or do you think that just says that it's a maturing company.
I think that's the message that they want out there they want their sales force telling the people they're actually doing the buying.
-- it's one thing with the financial community sees things and how everyone else is judging them based on their numbers right here today.
But over the next three months what advertisers are gonna be looking at are numbers that say that.
Google's getting you more clicks and they're getting you more clicks for less dollars.
On a consistent basis.
Don't you wanna put more of your ad budget with us okay brighter -- hold on we got some more information Sandy's been digging through the numbers -- -- fab four's Andy let.
So they came -- effectively Google's board has unanimously approved a two for one stock split.
You know that's still digging through the -- words here are the actual release but.
The company itself said in the release that this is effectively.
A two for one stock split that's OK and give you right now.
-- -- let me just go back to Rick for -- because I wanna pick up when something that Bryan said.
-- what about the cost per click is it's cool really prepared.
For all the competition that it sees coming from the social web sites I mean that's.
That's where some of some of the folks say that they.
Maybe are getting a little behind.
Yes I so I think we have look at a couple things that I don't bells for me -- break down sorry go ahead Rick yeah.
Yes so what we see isn't what by a large search is not being disrupted by social search is not being disrupted by display.
This is a longer term fear what we have we have an hour than change and what this drives -- it drives better advertiser are -- As prices come down the I don't think it's about the volume of clicks for an individual advertiser.
It's about continuing to -- capture that advertising spend.
The aggregate spend is really important here number one.
Secondly we actually see display.
Click CPC ads coming through this as well often times CPC ads in display market.
And create a blended rate is lower and -- CPC market.
One of the things we really would like to see -- I think all of -- like to see Brian included I'm sure.
As a better breakdown.
Of the types of advertising would never going into this revenue mix by the we see mobile whether we see pure display and whether we -- here search.
And looking better deconstruct exactly what is going on in this market.
One of the things we're not seeing -- harassing a disruption.
An advertiser with the wanting to spend with Google and that is the Paramount issue that we need to look at for disruption in the quarter.
Rick summer Brian -- thank you guys terrific analysis by the seat of -- -- here thank you very much.
