Once again, stock analysts cannot make up their minds about the search advertising model. Month on month, these guys swing recommendations like Babe Ruth swung at fastballs – with reckless abandon and little emphasis on quality. The latest is a flip flop by the folks over at RBC Capital Markets (see Google, Yahoo! Ripped).
Now, I have to give some minor credit, as the companies in question cannot proceed on their tracks forever. But putting in fairly aggressive buy recomendation in January, only to reduce the price target by close to 20% in February, leads me to believe that they really have no idea what is going to happen.
They don’t. Running searches on a Windows 2000 workstations, crunching a one page spreadsheet with nary a variable built in which resembles the companies’ business model drivers, and then issuing a public press release, hardly qualifies these analysts as credible. But that is IMHO.
For further reading, see Sell-side Equity Analysts Continue Guessing.
Online ad trends continue skyward at a blistering pace. I wonder if the analysts are reading articles like RED HERRING | Online ads up 32 percent, or just resaving their spreadsheets for General Motors as GOOGLE-YAHOO-COMBINED FORECAST.XLS.