Android Allows Google (GOOG) to Monetize Search Beyond the Desktop -Piper Jaffray

September 23, 2008 2:34 PM EDT

Piper Jaffray is out with a research report explaining why Google's (Nasdaq: GOOG) first ever Android-powered phone, the G1, is very important to the company's big picture. Put simply, the firm believes that "The G1 phone is an important step in Google's quest to push mobile carriers and handset manufacturers to make devices more internet friendly." The firm's Senior Research Analyst, Gene Munster, maintains a Buy rating and $785 price target on shares of Google. Also, Google is Piper's Alpha List pick for the Internet group.

As Google's traditional search continues to slow, the firm believes search revenue from mobile could increase from an estimated $30-$50 million currently to $2 billion by 2012, which would represent about 6% of Google's sales. Piper calls mobile "the key revenue driver in the long-term for Google's search business."

Piper points out that the sale of the G1 phone is not the important part, but rather that Google will be getting its Google branded search and internet services to the public using the Android. Over the long-term, the Android will allow Google to "monetize search beyond the desktop."

With shares of Google trading around $434 today, Piper's $785 price target represents potential price appreciation of about 80% from current levels.

Google, Inc., a technology company, maintains index of Web sites and other online content for users, advertisers, Google network members, and other content providers.

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• Piper Jaffray
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