Skip to main content

Market Overview

Citigroup: Google's Exposure To Apple's Safari 'Priced In'

Share:

Mark May of Citigroup commented in a note on Thursday that Google Inc's (NASDAQ: GOOG) potential loss of being the default search agreement on Apple Inc.'s (NASDAQ: AAPL) mobile Safari browser represents a “a near-term and quantifiable risk.”

“We estimate that Google's total world-wide search revenue will be $51 billion in 2014, of which $12 billion or 24 percent will come from mobile devices,” May wrote. “Of this, we estimate that $7.2 billion or 60 percent of total mobile search revenue in 2014 will come from its default search deal with Apple's Safari mobile browser.”

Related Link: Facebook's New Search Feature Is A 'Brilliant' Way To Take On Google

May notes that Google's search revenue stream is expected to grow 48 percent year-over-year this year and represent 21 percent of the incremental revenue growth and contribute $5.0 billion in net revenue.

However, May does note that it is likely Safari would include an option for Safari users to manually switch the default search engine back to Google and that 20 percent of iPhone and iPad users will do so. As such, the analyst estimates the ultimate impact to Google will be $7.5 billion in gross revenue and $4.8 billion in net revenue in 2015.

Bottom line, according to May, “Google shares are now pricing in the aforementioned risks – at least the one that we can reasonably quantity, which is the Safari search risk.”

Shares of Google are Buy rated with a $652 price target.

Latest Ratings for GOOG

DateFirmActionFromTo
Feb 2021CitigroupMaintainsBuy
Feb 2021JP MorganMaintainsOverweight
Feb 2021Morgan StanleyMaintainsOverweight

View More Analyst Ratings for GOOG
View the Latest Analyst Ratings

 

Related Articles (GOOG)

View Comments and Join the Discussion!

Posted-In: Citigroup Mark May Safari SearchAnalyst Color Price Target Analyst Ratings

Latest Ratings

StockFirmActionPT
AGCOCredit SuisseMaintains142.0
COSTOppenheimerMaintains350.0
COOBairdMaintains384.0
AMGNBarclaysMaintains230.0
BURLDeutsche BankMaintains320.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com