Wedbush Warns Of Decelerating Trends At Google

Wedbush issued a company note on Google Inc (NASDAQ: GOOG) on Wednesday after its SEM conference call with top industry analysts. Wedbush rates Google as Neutral with a $530 price target.

Analysts Shyam Patil and James Dix wrote, "Overall, commentary from the SEMs seems to suggest deceleration in growth in 1Q... 1Q spend slowed to 13 percent y/y from 19 percent y/y in 4Q and is tracking below 1Q expectations of ~15-16 percent growth, driven by a sharp deceleration in clicks growth (due to various factors including the Firefox and eBay relationships as well as moderating PLA and tablet growth)."

Rising mobile application engagemnt is one of the key factors causing the deceleration in Google's clicks growth. Specialty search engine also played a role in hurting Google's core business operations. Despite growth tracking below expectations in the first quarter, the analysts remain optimistic about advertisers picking up spending after a seasonally slow first quarter. Google is expected to keep gaining market share as users with non-traditional web platforms are switching their default search engine to Google.

Shares of Google closed Tuesday at $548.00.