And Then There Were Three, Horsemen of Tech

Well, so much for Google.

Changes the company’s beancounters made in accruals for bonus payments unexpectedly shifted $60 million of expenses into the quarter. The company continues to spend heavily in personnel and infrastructure, and much like Ronald Reagan, will continue to do so and bring the rest of the world to their knees, eventually.

Moves in $500 stocks always make for good copy, but changing the decimal point takes the stock from $54 to $51. Yawn?

Stu Barry of ThinkEquity, who rates the stock as a buy with a $700 price target on the shares, said the higher expenses with increased bonuses and hiring do not reflect the company’s fundamental business opportunity.

“I don’t think there’s anything here to make anyone worry about the fundamentals,” he said in an interview. “I think expectations were that they would outperform on both the top and bottom line, and they didn’t deliver.”

In a brief note to clients, Mark Mahaney of Citigroup said the results were “incrementally less positive” but added that the company “continues to exhibit the strongest fundamentals in the sector, with a reasonable valuation.”

Mahaney has a buy rating and $600 price target on the stock. MarketWatch

With Ebay, Yahoo!, Google and even the mighty Baidu trading off, the internet stocks are not exactly having a memorable week. But it is not so bad, trust me, they are far more profitable than most blogs.
no position

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