A sputtering economy, implosions at financial institutions, or just plain bad management -- on any given day, investors can name a number of reasons to sell a stock. Yet while panic never benefits investors, it's wise to play devil's advocate with investments from time to time.
In Motley Fool CAPS, more than 120,000 members have weighed in on nearly 5,400 stocks, sharing bullish and bearish opinions alike.
A total of 13,913 members have weighed in on search behemoth Google's (Nasdaq: GOOG) chances of success. I've already plucked out some of the bullish rationale backing Google today, so here are three counterpoints to consider, courtesy of CAPS:
1. Declining ad revenue
Being king of the mountain doesn't matter much if that mountain is shrinking. The weakening economy is putting pressure on Google, Baidu.com (Nasdaq: BIDU), and many other types of ad-supported media, such as the New York Times (NYSE: NYT). While the leading media companies may be strong, advertisers are still pulling back.
2. Wasted money
Google's had some success with popular products that are similar to those of Yahoo! (Nasdaq: YHOO) and Microsoft (Nasdaq: MSFT), like Gmail and Google Docs. But it's also spent tons of money acquiring numerous small companies, and it's poured a lot of resources into speculative projects that were difficult to monetize. The practice of speculative ventures in this environment doesn't fly as well as it did in more heady days, as Google's recently terminated Lively project demonstrates.
3. Cost-control issues
While innovative and efficient companies like Apple (Nasdaq: AAPL) have repeatedly blown past Wall Street's expectations in previous quarters, Google can't say the same. Spending shareholders' money on such perks as expensive day care and free meals for employees may have helped it attract some bright workers, but it's also led Google to join Yahoo!, IBM (NYSE: IBM) and scores of other companies in paring back its headcount to trim operational expenses.
Of course, Google has survived and thrived in the past. The question of whether the company can do so in today's environment makes CAPS such a great resource to augment your own analysis.
To see what the very best CAPS members are saying now about Google, click over to Motley Fool CAPS and have a look -- it's all free, and we welcome your opinion, too.
Further Foolishness:
On Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool's own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). The Pro team also incorporates proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.
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