S&P Initiate STARS Coverage on Shares of Google with “Hold” Recommendation

    August 25, 2004

Standard & Poor’s Internet software and services equity analyst has initiated STARS coverage on the shares of Google with a “Hold” recommendation at $106.46 per share.

The leading provider of independent investment research, ratings and indices, Standard & Poor’s made this announcement through Standard & Poor’s MarketScope, its real-time market intelligence service.

“Google is a leader in keyword search, the largest category of online advertising. Largely reflecting expected gains in its AdWords and AdSense advertising programs, we project revenue increases of 104% in 2004 and 66% in 2005,” says Scott Kessler, Internet Software & Services Equity Analyst, Standard & Poor’s Equity Research Services. “We are establishing earnings per share (EPS) estimates of $1.24 for 2004 and $2.30 for 2005. Based on intrinsic, relative, and option analyses, and accounting for notable risks we see including competition, execution, and upcoming lock-up expirations, we are setting a 12-month target price of $118. We expect Google shares to be very volatile,” concludes Kessler.

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