Barclays: The Google search monopoly case has little impact on Microsoft
Barclays Bank released a report stating that the antitrust lawsuit against Google in the United States has little impact on Microsoft, giving Microsoft an "overweight" rating with a target price of $475. Analysts pointed out that Bing accounts for a small proportion of Microsoft's total revenue, and investors have insufficient awareness of the impact of the investigation. If Google is forced to adjust its agreements with partners, Bing may gain market share, but the changes are expected to be minimal in the short term, with impacts anticipated to manifest by 2027
According to the Zhitong Finance APP, Barclays Bank released a report on Monday stating that the U.S. Department of Justice's antitrust lawsuit against Google (GOOG.US, GOOGL) has little impact on Microsoft (MSFT.US). Barclays has given Microsoft an "overweight" rating with a target price of $475.
Barclays analyst Raimo Lenschow stated in the report: "Since Bing accounts for only a small portion of Microsoft's total revenue (5% of total revenue in fiscal year 2024), based on our discussions with investors, the impact of any developments seems to be largely overlooked, especially as many software investors are unaware of the ongoing investigation. However, after the long-awaited proposed final judgment from the U.S. Department of Justice, we believe Microsoft investors should pay more attention to the final ruling of this case."
Lenschow noted that if remedies include terminating Google's revenue-sharing agreements with other global companies, or if Google integrates its search services, Bing may gain some market share. In this scenario, Google may be forced to provide some technology to its partners and offer search text ads to U.S. partners within a year while retaining only 10% of its total revenue.
"Meanwhile, Google would only be allowed to integrate 25% of search text ads, which means partners (like Apple) would need to fill the remaining search ads either through their own technology or through new partners like Bing," Lenschow added. "Theoretically, this would provide Microsoft with a unique opportunity to gain market share for a period of time."
Although this may be positive for Microsoft, Lenschow acknowledged that there would only be "slight changes" in the short term, and any impact from this case would not be felt until at least 2027