Confusion Over Search Policies May Be Behind Perion Network's Decline

Perion Network Ltd PERI has fallen nearly 14 percent over the past week due to mounting concerns that its revenue will be adversely impacted by changes to Google Inc's GOOG search policy.

On January 13, Perion Network CEO Yacov Kaufman commented, according to Bloomberg, that Google policy changes "would be something that would be important to companies like Ask or About.com, companies that are actively using the AdWords campaign, and we aren't."

Kaufman added that both Google and Microsoft Corporation MSFT are likely to make changes in 2015 in order to boost revenue and improve user experiences.

Perion’s CFO did acknowledge earlier in the month that revenue will continue to decline in 2015, adding to the pressure on the stock.

Benchmark analyst Daniel L. Kurnos noted, however, that to his knowledge, "no SEM arbitrage policies have officially been changed to date" and that "Perion has little to no exposure to Google beyond Chrome."

Benchmark maintains a Buy rating and $8 price target on the stock.

Perion Network recently traded at $3.33, up 2.78 percent.