Market News

Google Sets Record Straight About Misleading Attack On Ad Services

Google responded to a complaint by Texas Attorney General, Ken Paxton, on Sunday in a blog post that called the AG’s claims against the company “misleading.”

Paxton filed a complaint about Google’s (GOOGL) advertising technology business, alleging that Google broke antitrust laws and abused its dominance of the internet search business.

Google’s Economic Policy Director, Adam Cohen, wrote, “AG Paxton tries to paint Google’s involvement in this industry as nefarious. The opposite is true.” He added, “We’re never going to be able to please everybody. But that’s hardly evidence of wrongdoing and certainly not a credible basis for an antitrust lawsuit.”

Cohen went on to dispel some of the myths and inaccuracies about Paxton’s complaints, including the allegation of excessive fees and unfair bidding practices that “secretly stacks the deck in Google’s favor,” ultimately hurting publishers.

Cohen responded to these accusations, stating that Google’s fees are actually lower than reported industry averages, and that the company has created an “Open Bidding” process, which addresses many of the drawbacks of the traditional “Header Bidding” processes. Cohen explained that the Open Bidding process increases demand for publisher inventory, which enables publishers to generate more revenue.

Cohen ended his blog post by assuring publishers and advertisers that Google will continue to create a sustainable advertising industry that supports free content for everyone, and that Google looks forward to defending itself against Paxton’s allegations in court. (See GOOGL stock analysis on TipRanks)

Jefferies analyst Brent Thill reiterated his Buy rating on Google last week, raising his price target from $2,000 to $2,150. This implies upside potential of around 24% from current levels.

Thill believes that GOOGL should benefit from “ad spend recovery, pent-up demand for Google Cloud, and call option on Waymo,” after underperforming other large-cap internet stocks in 2020.

Consensus among analysts is a Strong Buy based on 26 Buys and 2 Holds. The average price target of $1,973.65 suggests upside potential of around 14% over the next 12 months.

GOOGL scores a Market Neutral 6 on Tipranks’ Smart Score rating, indicating that it is most likely to perform in line with market averages.

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