A surprising bear on Google

Henry Blodget (yes, that Henry Blodget), is raising eyebrows all over the Web with a blog article outlining a big potential change in Google's stock price--downward.

googdown

Google's stock has been soaring lately, and other analysts have predicted it could hit $600. But Blodget has set forth a few scenarios that could bring things back to Earth quickly; most center on a decline in advertising revenue due to click fraud, competition or just a general slowdown.

"Google's major weakness is that it is almost entirely dependent on one, high-margin revenue stream," he wrote. "The company has dozens of cool products, but with the exception of AdWords, none of them generate meaningful revenue. From an intermediate-term financial perspective, therefore, they are irrelevant."

Blog community response:

"Interesting read, once again, it could probably be true, it's just a matter of when."
--Frank the Financially Savvy Atheist (The F.S.A.)

"And he nails the biggest problem of all--they need some other revenue generating products! You can't run a sustainable business when you only release beta products."
--MasterMaq

"He may be proved wrong about the threat of click fraud and the growth of the paid-search market but it's always a good thing to have against-the-grain thoughts when everyone else is running so hard and fast in the opposite direction."
--Mark Evans

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