Standard & Poor's gives Google the U.S. debt treatment
Standard & Poor’s on Tuesday downgraded Google’s stock (NASDAQ: GOOG) to a “sell” from a “buy” in the wake of the search giant’s $12.5 billion acquisition Monday of Motorola Mobility. S&P lowered Google’s price target to $500 from $700.
That’s because in buying Motorola Mobility, Google acquired a low-margin device manufacturer with a huge payroll. In contrast, Google’s core business — online advertising revenue derived from its market-leading search engine — generates tremendous margins.
