Benchmark Maintains Hold on Google Despite European Weakness

The Benchmark Company has published a research report on Google

commenting on the company's European weakness during 1Q 2012. In the report, Benchmark writes, "Our 1Q12 channel checks indicate the following: North America, which is about 47% of Google's revenue, started somewhat slowly but had a good quarter, up about 15% y/y; Europe, which we estimate at 35% of Google's revenue, remains in the doldrums and was roughly flat y/y; emerging markets continue to grow rapidly but represent a relatively small percentage of revenue (around 18%). We view the following as positives: 1) Google continues to gain share rapidly in the display market especially through its Ad Exchange; 2) past search enhancements such as Sitelinks and the recent removal of right rail ads emphasize the top-of-page paid links, which is helping the click through rate; 3) channel checks indicate March was a strong month globally, notably accelerating the pace from earlier in the quarter." Benchmark maintains its Hold rating and $625 price target on Google, which closed Friday at $642.59.