Things Go Better With Google

At the beginning of the year, Safa Rashtchy, senior research analyst for Internet and media marketing and managing director of Piper Jaffray, made the bold prediction that Google would hit $600 a share in 2006. At the time we wrote, "The primary reason Mr. Rashtchy is so enthusiastic about the stock is that he expects Google will continue to increase its share of the rapidly growing Internet search market."

Safa is right about that in that Google's market share of the search business is increasing at the expense of Yahoo! and MSN. In fact, he predicts that the number of advertisers using local search will grow from 500,000 to 2 million – 4 million. That's a pretty safe bet.

Fortunately, we're not in the stock price predicting business, but we do dabble in forecasting the growth of advertising overall and the types of advertising. Like Safa, The Kelsey Group believes that local search is going to continue to take a growing share of the increasing global online advertising business. But this man is evangelical. "Search will become a central element in a highly fragmented media mix," he told the 470 people in the audience at this week's Interactive Local Media conference, Drilling Down on Local.

"Search is now the trusted medium and local search is an integral part of the growing virtuous circle." A major reason for Google's success, he believes, is that "advertisers want to be associated with Google." If Google is able to take on the same kind of panache that used to exist for companies that advertised on NBC in the '50s or The Wall Street Journal in the '80s, Google could still see $600 by year-end.