2006: Year of the Googled? |
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Published
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Thu, 05 Jan 2006 02:05
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SAN FRANCISCO - If 2005 was the year that Google moved into mainstream online functions, 2006 could well be the year of Google, according to analysts at the investment firm Piper Jaffray. For the target price of Google shares has just been predicted to jump by 35 percent to a staggering $600 from the current $445.
Safa Rashtchy, an analyst at Piper's Internet division said that Google was projected to grow by leaps and bounds into 2007 and capture significant market share as well. "While the stock may have its ups and downs throughout the year, we believe it will reach $600 by the end of 2006 and we prefer to have one 12-month price target rather than raise it every quarter," he wrote in a note to clients.
Google remains the online search behemoth despite best efforts by rivals like Yahoo and Microsoft to lure away users to their side. Google debuted on the markets at $85 in August 2004 and has grown phenomenally since then to a high of $446 reached last month. In 2005, Google stock was up by 115 percent riding on the back of a 127 percent gain after the IPO in 2004.
The main area of Google's revenue, online advertising is all set to boom this year and Google is nicely placed to take advantage of this. Last month, the Mountain View, California-based Company brought itself a 5 percent stake in America Online and will allow graphic ads to be displayed.
This means that the lucrative advertising market will see the entry of more players who were generally put off by the text only ads that Google permitted so far. Piper Jaffray expects that the advertising market will grow by $14 billion this year and Google will corner the lion's share of the gains.
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Google is selling another lot of shares to raise $4 billion 