The Zacks Analyst Blog Highlights: Google, Amazon.com, eBay, Oracle and JPMorgan Chase & Co.

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Jun 04, 2012, 09:30 ET

CHICAGO, June 4, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Google Inc. (Nasdaq:GOOG), Amazon.com Inc. (Nasdaq:AMZN), eBay Inc. (Nasdaq:EBAY), Oracle Corp. (Nasdaq:ORCL) and JPMorgan Chase & Co. (NYSE:JPM).

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Here are highlights from Friday's Analyst Blog:

Retailers Pay for Google e-Shopping

Google Inc. (Nasdaq:GOOG), the world's most popular Internet search engine, is leaving no stone unturned to reap maximum benefits from its search engine business. So long a free product service, product placements and information displayed by merchants in the company's general search results will now be chargeable.

So far, retailers have displayed their products for free by providing Google some related data. The new move, to be known as Google Shopping, will ask retailers to pay if they want to display their results, and will list only those merchants who pay for the service. Placements on Google Shopping will be based on bids that retailers send via constant feed. The new system will replace Product Search by fall 2012.

We do not see Google charging a certain amount from retailers for the placement of their products on Google site as a negative but it could definitely alienate some retailers that were providing good data. However, the company must find new ways to expand its revenue base in order to win in this cut-throat business world. Retailers will feel the pinch but they will be on their toes to update product data with accurate pricing and special offers, keeping customers abreast of the best deals.

Google delivered a stellar first quarter, with gross revenue touching a record $10.65 billion. Revenues from both Google-owned and partner sites continued to grow double digits on a year-over-year basis. But in terms of shopping-related searches, Google lags online retail giants Amazon.com Inc. (Nasdaq:AMZN) and eBay Inc. (Nasdaq:EBAY).

In April, U.S. Internet users made about 80 million searches using Google's shopping-search site, while eBay and Amazon handled about 900 million and 335 million searches respectively, according to research firm comScore Inc. These figures in themselves indicate that though Google is the No. 1 web-search engine, it needs to perk up shopping related searches. So, any ethical move which could strengthen its competitive position is welcome.

Following the news, Google shares fell 1.3% on Thursday but its recent patent win against Oracle Corp. (Nasdaq:ORCL) could limit further declines.

However, other legal entanglements related to competitive matters or patent infringements remain an overhang, keeping the Zacks Rank on Google shares at #3, which translates into a short-term Hold recommendation.

JPMorgan Reorganizes CIO Unit

In the latest fallout of the huge trading loss, JPMorgan Chase & Co. (NYSE:JPM) has decided to remove the private equity-like operations – the special investments group – from its Chief Investment Office (CIO). This was first reported by Financial Times on Thursday. This group makes investments in other companies.

The special investments group has made noticeable private equity investments in Johnson Publishing, the publisher of Ebony magazine as well as in LightSquared, which recently filed for bankruptcy protection and France-based Technicolor SA.

Though not implicated in the trading loss, special investments group is banned from looking for fresh investment opportunities such as the private equity investments and risky credit derivatives positions. The group is now being included in JPMorgan's Corporate division within the Corporate/Private Equity segment. Moreover, the unit will be re-focusing on its main activity, which is asset-liability management.

The restructuring efforts are part of the overall audit of the risk management ability of JPMorgan. In May, in its quarterly regulatory filing, the company stated that its CIO incurred nearly $2 billion mark-to-market losses during the first six weeks of the current quarter in its synthetic credit portfolio.

This portfolio was to protect the company against the potential losses on its large holdings of loans, deposits and bonds. However, the company's strategy backfired as the repositioning of the credit portfolio was poorly monitored and executed.

The CIO unit is a big money-making division of JPMorgan, creating billions in revenue from hedging and other types of risk mitigating techniques. The customers considered the company to be a safe haven and entrusted their money with them, which eventually led to huge amount of deposits lying idle with the company.

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