What: Shares of Etsy (ETSY +0.56%) skyrocketed 34% on Friday after tech gorilla Google (GOOG +0.44%) mentioned the online handmade marketplace favorably in its conference call.
So what: Etsy shares had slumped sharply since its April IPO on concerns over big bottom line losses, but the positive comments from Google are quickly easing some of those worries. Specifically, Google mentioned Etsy as one of the websites experiencing a surge in traffic due to its ramped-up "deep-linking" efforts, reigniting optimism on Wall Street over the durability of its competitive position going forward. Of course, there's also quite a bit of speculation going on as traders, who are likely viewing the Google-wink as sign of strong results to come, try to squeeze in before Etsy's next earnings report.
Now what: "Developers like Etsy are already seeing a boost in traffic as a result of deep linking," said Google chief business officer Omid Kordestani. But while Etsy's breakneck top-line growth might certainly continue in the near-term, a whole slew of questions still surround the company's long-term viability. Given the massive threat from Amazon's new Handmade service, as well as the lingering issues surrounding counterfeit items, I'd wait for much of today's exuberance to fade before betting too heavily on Etsy's prospects.
