NEW YORK

Shares of Google Inc. gained Friday as an analyst said the company is poised to gain from changes to its online ad platform, AdWords, which should drive revenue higher.

Google’s stock rose $17.99, or 4 percent, to $473.27. In the past 52 weeks, the shares have traded between $412.11 and $747.24, and are off 34 percent since the start of the year.

Bernstein Research analyst Jeffrey Lindsay said Google is changing its AdWords program to drive up pricing. Google gets paid when users click on a sponsored ad that comes up as the result of a Google search.

According to data from comScore Inc., Google’s click-through rate grew 3 percent in February compared with a year earlier, and January saw no increase compared with January 2007.

But Lindsay said Google is “slapping” low quality advertisers and arbitrage marketers off its search results pages by re-pricing many low-cost keywords used by these companies. This is driving down paid clicks, but also driving keyword pricing higher, which comScore doesn’t detect.

“What ComScore doesn’t give is the other side of the story — the pricing or cost per click, which Google has been successfully driving up for several quarters now,” Lindsay wrote in a client note.

However, Lindsay said it’s unclear whether these pricing changes will be reflected in first-quarter results.

Lindsay rates the stock “Outperform” with a $750 price target.

Article source - http://www.businessweek.com/ap/financialnews/D8VR7AKG1.htm

For more info please visit us at – Website design & development & search engine optimization