Google, Yahoo, ValueClick: To Buy or Not To Buy?
ADOTAS – In the immemorial words of Bruce Springsteen: they’re “going down down down … down down down.” As Google, Yahoo and ValueClick’s stock hit the skids, many wonder if now’s the time to buy and score a deal.
Google is tough to bet against in any market with its monopoly in online search and its continued expansion into pretty much every other sector of the online industry. (Remember back in 2004 when the stock debuted at $85 and Yahoo and Microsoft still ruled the Net? Most observers thought it was only a matter of time before Google got snapped up by one or the other). It hit a high note of $747.24 per share in November of last year when it started trading on the Nasdaq and then hit rock bottom in March of this year at $400. It’s been moving up since – as of around noon it was at $523.36, down $5.56 for the day. Analysts expect the stock to climb 27.5% per year for the next five years – so many are shilling the stock as a smart buy. (Historically, Google has returned an average annual compound rate of 31.3%).
Yahoo’s months-long stint of internal psycho-drama makes for a riskier buy. Today’s announcement of the company’s second significant management shake-up in two years certainly isn’t going to help its prospects. Yahoo’s third-largest shareholder, Legg Mason Capital Management, is signaling that it may not support the slate of directors billionaire shareholder activist Carl Icahn’s came up with to replace Yahoo’s current board (up for re-election on August 1). Yahoo’s stock has swung wildly reaching an all-time low of $19.05 just this year. As of about noon it was trading at $21.11, down 1.17%. While this buy isn’t for the faint-hearted, Yahoo’s recent ad deal (and its latest move to proactively tackle its internal chaos) with Google makes the company a buy, albeit a dicey one.
So what about ValueClick? Well, it’s down about 28% for the year — but it’s a takeover target for any company that wants a serious stake in online advertising (it currently reaches about 75% of U.S. online consumers with its display ad network). As of about noon it was trading at $15.10, up about .01%. ValueClick is facing serious issues though — with the FTC probe’s fallout and increasing competition from superstar Google. At this point, a ValueClick buy could be bargain, but analysts and observers agree that it’s the riskiest of the bunch.
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