Analyst: Google A “Buy” Regardless Of China

Since Google announced its "new approach to China" on January 12th, the Dow’s gone up 1.20 percent and the Nasdaq’s risen 3.52 percent. Google’s stock, meanwhile, has fallen 7.41 percent. But one financial analyst stated today that there’s no need to panic if Google pulls out of China.

Indeed, if Google stops operating in the country, the immediate effect in terms of earnings should be almost impossible to notice. Google makes very little money in China – "about 1 percent of their total revenue," according to Clayton Moran of the Benchmark Company – "so it’s not a meaningful contributor."

Moran’s maintained his "buy" rating on Google as a result. It’s only half a decade down the line that a decision to leave China might come to represent a problem.

Moran told CNBC, "Five years from now, it’s about growth and the potential for growth and China’s obviously the largest Internet market by users. So therefore it was a big opportunity for Google and they’ll miss out on that."

For the record, Baidu’s stock is up 1.84 percent so far today, and has surged 44.06 percent since Google announced that it might leave China.

There are 2 Comments. Add Yours.

A7LA StaR
March 23, 2010 at 7:21 am

?? ???? ?????
Gregw
March 23, 2010 at 5:27 pm

I am happy that Google is making this choice and not succumbing to the autocratic regime in China. Censorship is a terrible devise used by suppressive nations and governments. The recent court maneuvers by Italy reveal this same type of autocratic suppression. I am referring to the guilty verdicts of three out of four Google executives for a you-tube video from 2006, which they had no connection with.
In Italy the Prime Minister personally owns the majority of the media, and controls most of the remainder. He is trying to control the Internet as well. I published a story about this and subsequently my blog has been removed from Diggita, one of the major Italian news feeds. Until my post Diggita had published most of my news stories.
You can read the post here: http://www.raief.com/2327/google-convictions-will-not-have-wide-web-impact/
I explained that most of the autocratic regimes, whether communist, or not, really do not contribute enough to online advertising dollars, commerce, or intellectual substance compared to other countries, so they really will not be missed.
Anytime there are restrictive media and knowledge in place within a country the commerce is also affected and reduced. Which means that their contributions are not that great to begin with and this should be noted when making a decision such as the one that Google is being forced to make in China.