Piper Said comScore Data Suggests Google (GOOG) Will Miss, But Shortfall Will Not Be That Bad

March 27, 2008 7:48 AM EDT

Piper Jaffray comments on Google (Nasdaq: GOOG) comScore paid click data. Piper noted Google's paid clicks were down 3% m/m and are tracking down 12.5% q/q, vs. Street revenue up 8% q/q. Total search query volume for Google was down 4.6% m/m. Paid clicks (down 3% m/m) for Google were down less than total searches (down 4.6% m/m).

The firm now expects revenue to be flat to up 5% q/q for March, and are modeling Q1 up 3% q/q. Previously they had been expecting up 8% q/q.

Piper lowers its price target on Google from $806 to $790, maintaining its Buy rating.

Piper concluded, "The second month of comScore gives us further evidence that Google will fall short in the March quarter. However, we believe the magnitude of the shortfall will not be as bad as the comScore data is suggesting."

Reasons why Piper doesn't think it will be as bad as the comScore data suggests:

1. Expect Strong Month of March. Over the past 4 years, March has been one of the strongest months for total Internet search.

2. Thoughts From SEMs. Our checks with two SEMs last night revealed that search budgets have not been decreasing, which may suggest marketers are increasing bids on keywords.

3. International revenue will likely account for 50% of Google's total revenue.

4. Number Of Queries With Ads Decreasing, Response Increasing. [LJ]

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