Wed, Mar 01, 2006 - Page 11 News List

Google stock rises amid renewed optimism

AP , SAN FRANCISCO

Google Inc's stock price continued its recent upturn amid renewed investor optimism about the moneymaking prowess of the Internet's leading search engine.

Shares of the California-based company surged US$12.98, or 3.4 percent on Monday, to close at US$390.38 on the NASDAQ Stock Market. Despite the rebound, Google's shares remain well below their record high of US$475.11 reached in early January.

The recent recovery reflects yet another swing in sentiment about one of the US' most scrutinized stocks.

The rampant investor anxieties unleashed by a letdown in Google's fourth-quarter earnings have been supplanted by revived confidence in the company's ability to develop more products and negotiate more deals that will boost its future profit.

Analysts are expecting Google's profit this year to approach US$3 billion, improving upon last year's earnings of US$1.47 billion.

The latest bit of Google enthusiasm appeared to be driven by the expansion of Google's online payment and video services, as well as an analyst report suggesting the company will soon announce a deal to install its software on Dell Inc's personal computers.

Google's top executives are also expected to reassure and possibly excite investors tomorrow when they're scheduled to discuss the company's strategy and products with stock market analysts.

``We believe the [analyst meeting] could be a positive catalyst for Google shares as investors gain greater insight and comfort'' about the company's prospects, Lehman Brothers analyst Doug Anmuth wrote in a research note on Monday.

UBS analyst Benjamin Schachter and Citigroup analyst Mark Mahaney also provided upbeat assessments about Google in their own reports issued on Monday.

Both analysts were intrigued with Google's test of an online payment system for its recently introduced classified advertising system, known as Base.

Google late last week began processing payments for "a very small number of sellers" in the listing service.

Base currently has about 40 million listings, Mahaney has estimated, laying the foundation for an e-commerce market that could generate a new source of revenue for the company if the payment system catches on.

Google so far makes virtually all of its money from online ads.

In his note, Schachter also reported that he had just bought a Dell computer featuring factory-installed Google software -- a toolbar and desktop search tools -- as well as a setting designed to send Internet traffic to a Web page jointly operated by Google and Dell.

The cobranded Web page, (www.google.com/ig/dell) follows recent reports that Google is negotiating a three-year deal that will pay Dell US$1 billion to install Google's software on its computers.

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