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Google's Achilles Heel: Page 3 of 17

Wall Street loves it. Consumers are begging for more of it. Other companies want to be it. But Google has its vulnerabilities--excessive reliance on search advertising, lawsuits, eroding public trust,
January 24, 2006

- Google earned $3.64 billion from U.S. online ad revenues in 2005, representing 69% of all paid search advertising, according to eMarketer.

Still, some prominent pundits are predicting a stumble for Google this year.

"Google isn't invulnerable, and in general the risks are where most people aren't looking," said Scott Kessler, an equity analyst with Standard & Poor's, who bucked the tide last week by saying in a research note that Google's stock was overvalued, downgrading the stock from hold to sell. Google stock prices took a hit as a result.

Google faces risks from being too dependent on search advertising, an onslaught of lawsuits--particularly one involving click fraud--eroding support from the public, lack of focus, and the competitive threat from Microsoft.

Google declined to comment for this article.

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