Google Sees Little Impact From Apps Business

Trefis members say the number and price of the apps offer little upside surprise to the stock.
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Google

's

(GOOG) - Get Report

apps businsess accounts for a small portion of its stock.

Google competes with

Yahoo

(YHOO)

,

AOL

(AOL)

, and

Microsoft

(MSFT) - Get Report

in the search advertising market.

We currently have a Trefis price estimate of $683 for Google's stock, about 36% above the current market price of $504.

Trefis members have created forecasts for two key drivers of Google's stock over the last week: (1) Number of Google Apps Users and (2) Price per Paying Google Apps User. The members' forecasts suggest that Number of Google Apps Users and Price per Paying Google Apps User will trend in line with the Trefis forecast. These projections indicate very little upside to Google's stock.

We estimate Google Apps constitutes around 3% of the $683 Trefis price estimate for Google's stock. Below are charts showing recent estimates created by Trefis members for the two drivers .

The average of forecasts for Number of Google Apps Users created by Trefis members indicated a projected increase from 32.5 million in 2010 to around 91 million by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 32 million in 2010 to around 89 million by the end of the Trefis forecast period.

The member estimates imply a small upside to the Trefis price estimate for Google's stock. In the past, Number of Google Apps Users has increased from 4 million in 2007 to 20 million in 2009.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Google's stock to Number of Google Apps Users.

The average of forecasts for Price per Paying Google Apps User created by Trefis members indicated a projected increase from around $50 in 2010 to around $62 by the end of the Trefis forecast period, in line with the baseline Trefis estimates.

The member estimates imply limited upside to the Trefis price estimate for Google's stock. In the past, Price per Paying Google Apps User has been around $50.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Google's stock to Price per Paying Google Apps User.

Our complete analysis for Google's stock is

here

.

Trefis

is a financial community structured around trends, forecasts and insights related to some of the most popular stocks in the U.S.