Google shares have tumbled nearly 25% from a peak of $475 and Barron's have predicted that Google shares may fall another 50% due to Click Fraud and increasing competition from Yahoo (YPN) and Microsoft (MSN AdCenter).The share price (GOOG) could well be cut in half over the next year as the Internet giant grapples with growing competition from Microsoft and Yahoo!, increased pricing pressures in its online ad sales and mounting concern about what's known as click fraud.Barron's report also criticizes the wide use of employee stock compensation and sees Google in growing conflict with book publishers, cable companies and telephone companies.
A key phrase like "charity car donation" cost advertisers $35 per click in November. The phrase "home equity loan online" went for $27.89 and "mesothelioma attorneys" - essential for an asbestos lawsuit - went for $16.46.Certainly, prices paid for search advertising could take a fall. The search advertising market, in fact, has many of the earmarks of a bubble waiting to be popped.
Source: Google Gets the Gong - Barron's Online