Here is the power — and the weakness — of the financial press: Other media are reporting that weekly newspaper Barron’s critical article about Google is the reason why its stock fell.
The Associated Press wrote: “Shares of Google Inc. fell nearly 5% yesterday after Barron’s warned factors such as heightened competition, ad-pricing pressures and “click fraud” may cut the share price of the Internet search company in half over the next year.
“Barron’s, a financial magazine published by Dow Jones & Co., said the company will have to contend with increased efforts from Microsoft Corp. and Yahoo Inc. — both expected to improve their web portals in the next year — as well as phone and cable companies.”
Competing wire service Bloomberg News led with this: “Shares of Google fell as much as 5.4 percent on Monday after an article in Barron’s said the stock might fall by half in the next year.
“The article heightened concern about the growth of Google, which is based in Mountain View, California. Its profit missed most analysts’ estimates last quarter amid higher spending. Even before Monday, Google had lost almost $21 billion in market value since the earnings report as investors questioned the company’s prospects.”
And the San Jose Mercury News, which is the hometown newspaper for the Internet search engine, wrote, “A negative report in Barron’s — which envisioned a price for Google stock well below $200 — sent the Mountain View Internet search giant’s shares 4.7 percent lower today.
“Google stock closed at $345.70, down $16.91. You might recall that Google hit an all-time high of $475.11 just last month.
“The Barron’s article said Google, which relies heavily on online advertising revenue, is facing increasing competition from its biggest rivals, Sunnyvale Internet content giant Yahoo and Redmond, Wash., still-dominant-Windows-operating-system giant Microsoft.”
Just one thought about all this coverage given to the Barron’s article: If the information contained in the article is so newsworthy, then why didn’t these publications write this story themselves? Why rely on reporting of another media outlet — ostensibly one that some might say you compete with — to convey a critical piece of news that you’re validating by simply writing about?