Google Investor: Google May Lose Some Advertisers In China, But Don't Throw The Baby Out With The Bath Water

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GOOG Shares Rise Amidst Broader Tech Weakness
Google shares rebounded yesterday, closing the session up at $567.12 (18x 2010 EPS and 16x Enterprise Value / EBITDA). Upcoming catalysts include March quarter earnings (likely the third week in April); updates on changes to paid search results; Android adoption; and benchmarks surrounding newer initiatives (Wave, Chrome, Base, broadband network, etc.).

Google Could Lose Less Advertisers In China Than Most Think, Says Piper’s Munster
Piper Jaffray’s Gene Muster points out that Google.com.hk remains available in China.  Munster believes Google will lose about 20% of its advertisers in China during 2010, far below what the street is anticipating. Still, he also believes that Google could lose more wireless business as Chinese operators drop Google as their default search engine. Munster maintains his Overweight rating and $700 price-target.

How To Play Google Stock; Consider Options (Market Intelligence centre)
Google’s 52-week range is a big one; from lows of $340 to highs of $630. The stock shows support levels around $560 with resistance around $570. As a hedge, buy the May 2010 630 covered call which provides “0.76% downside protection and an 11.94% assigned return rate for an 85.43% annualized return rate.” Another play would be to go long the Jan 2011 500 Call and sell the May 2010 630 call. This trade provides no downside protection (should the bottom fall out) but yields a “41.69% assigned return rate for a 298.00% annualized return rate.”

Google Owns Nearly A Quarter Of The Chinese Mobile Search Market; But Not For Long (Market Watch)
Yesterday Analysis International said that Google holds 23.6% of the Chinese mobile search market (315 million average daily searches), slightly less than rival Baidu’s 26.6%. This might be the top of the market for Google as handset operators look to replace it as the bundled search engine given the recent clash with the Chinese government.

Google And Adobe Join Forces To Take On The iPad (Wired)
Google and Adobe are linking up to take on Apple. The announced integration secures Flash’s stronghold in Chrome OS based tablets out later this year,  which will compete directly with the iPad. Flash is not supported by the iPad, but is one of the most widely used video streaming formats. In theory, Chrome OS based tablet platforms that seamlessly integrate Flash might give manufacturers a leg up when negotiating with video content providers. In addition, users will have access to video directly on the browser, granting access to more content out of the gate.

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