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Google Downgraded from ‘Buy’ to ‘Hold’, Share Prices Take a Hit

As an effect of the growing threat from the social networking sites like Facebook, a brokerage and investment banking firm, Stifel Nicolaus, downgraded Google Inc. from ‘buy’ to ‘hold’.

Stifel is worried that the growth of mobile and social media websites like Facebook will adversely affect the core business of the internet search giant.

On a critical note to its clients Jordan Rohan, an Analyst at the Stifel Nicolaus, mentioned that the centre of gravity in the Internet is shifting from Google to Facebook, where more than 30 percent of Internet minutes are spend by the users. On this Rohan said that the Facebook is the “key gravitational force on the Internet.”

He further quoted that “Search just isn’t the bright shiny object that it was when Google became a public company in 2004”, reports Forbes (opens in new tab).

With the emergence, growth and wide usage of social and mobile media, the advertisers are not too keen to spend more on Google as observed by Rohan.

On Google Inc’s current policy to acquire Motorola Mobility Holdings for $12.5 billion, its biggest deal ever, Rohan said that “Large acquisitions like Motorola Mobility may become more frequent and could distract Google’s senior management team.”

Google hasn't yet made any comments on the move by Stifel.

Ravi Mandalia

Ravi Mandalla was ITProPortal's Sub Editor (and a contributing writer) for two years from 2011. Based in Ahmedabad, India, Ravi is now the owner and founder of Parity Media Pvt. Ltd., a news and media company, which specializes in online publishing, technology news and analysis, reviews, web site traffic growth, web site UI. Ravi lists his specialist subjects as: Enterprise, IT, Technology, Gadgets, Business, High Net Worth Individuals, Online Publishing, Advertising, Marketing, Social Media, News, Reviews, Audio, Video, and Multi-Media. He has also previously worked as Dy. Manager - IT Security at (n)Code Solutions.