Pivotal Downgrades Google, Upgrades Yahoo
Google downgrade due to "overly positive" response to the company's Q2
By John Eggerton -- Broadcasting & Cable, 2/7/2013 9:19:54 AM
In a note to investors Thursday, Wieser said the Google downgrade was due to an "overly positive" response to the company's second quarter numbers and falling margins as ads migrate to mobile devices where the margins are usually lower than for laptops and tablets.
He also points to increased content/production/licensing costs at YouTube. One possible offset to the declining ad margins, he said, could be Google's decision to not to allow advertisers to only target mobile devices. With Google having over 90% of paid search spending, not allowing advertisers to cherry-pick mobile platforms may help decrease the distinction between mobile and desktop ads.
Among the factors to any predictions for Web publishers, he says, are new competitors and government regulations and consumer "pushback" on data management and privacy.
Yahoo gets an upgrade due primarily to gains for Yahoo Japan, but also the announcement Wednesday that it would allow Google display ads on its various properties using AdSense and Admob.
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