The search engine giant's shares are down 18% this year, following a Jan. 31 earnings setback that cratered the once-invincible stock. So Google, after long sitting out the ritual in which companies and Wall Street court one another, is asking investors what they want to discuss at next month's meeting.
It's unclear how many people have been called or how long the survey has been going on, and Google didn't respond to a request for comment. But the effort will give the company a chance to tap into the concerns that have been building among investors.
"I have no idea how many people they are calling," says Martin Pyykkonen, an analyst with Hoefer & Arnett. He says he was contacted Wednesday by a firm hired by Google and replied that he wanted to hear about click fraud and pricing. Pyykkonen, who rates Google as a buy and has a $550 price target, said he didn't remember the name of the firm.Questions abound ahead of the March 2 meeting. Investors have long wondered about the impact click fraud has on Google's bottom line. Skeptics say it's a serious problem, a claim the company has repeatedly denied, though it hasn't quantified how often advertisers get refunds for fraudulent clicks. Figuring what's normal for Google also is a challenge for investors, considering its explosive growth and the grumbling of some advertisers about the prices for keywords. Google has had an often rocky relationship with Wall Street, dating from its initial public offering in 2004. The Mountain View, Calif., company provides no earnings guidance and is stingy with what information it does provide to investors. Wall Street analysts have a poor track record in forecasting the company's earnings. Before the Jan. 31 report, analysts consistently underestimated Google's growth. But that day, investors were looking for a good quarter and instead they got talk of how taxes were killing the company. The shares still haven't recovered. Google rose $14.72 at midday Thursday to $357.10. Most analysts still say the stock is a buy, though their price targets vary widely from $255 to $600. One analyst even suggested that the shares could hit $2,000. "I would see this as a positive sign," says Google shareholder Chuck Jones of Atlantic Trust Stein Roe, who doesn't feel slighted that he hasn't been contacted by the company. "It makes a lot of sense for an IR department to make sure that they are presenting what investors want to make sure that they talk about."