Analysts Don’t Like Alogithms

UBS Analysts are scratching their heads as they try to advise investors about Google’s future:

The world’s largest wealth management firm, UBS, issued a note this week advising investors that the unpredictable results of Google’s adjustments to ad systems and algorithms, combined with an expected 3Q seasonal downturn in online advertising, makes investing in GOOG a risky proposition in the short-term, at least until 3Q results are published.

The black box is impenetrable. Smart pricing? Landing page scores? Minimum bids rising and falling? Historical factors? Algorithms? It’s not just Mom & Pop who can’t make sense of Adwords any more, the worlds top analysts are stumped as well.

While some of the changes have increased minimum bids by at least 15%-25%,” read the note, “we simply do not know how many advertisers and how many keywords of the total Google ecosystem were impacted.

The article goes on to describe common arbitrage techniques.

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