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Google shares may fall another 50 pct-Barron's Sun Feb 12, 1:24 PM ET

SAN FRANCISCO (Reuters) - Shares of Web search leader Google Inc. (Nasdaq:GOOG - news) -- off 24 percent from highs set last month -- could face a further 50 percent decline, Barron's said in the financial weekly's February 13 edition.

Barron's scenario for a fall in Google's stock is based on speculating about what may happen if mounting competition or fraud by users of its Google's ad-buying system led to a 20 percent shortfall in bullish analysts' 2006 revenue estimates.

The weekly uses a back-of-the-envelope calculation to show how a 20 percent revenue miss could cascade into a 30 percent profit shortfall. Such a drop could then lead to a decline in the price-to-earnings multiple of the stock to 30 times earnings from the present P/E ratio of 41, it said.

"That would make the stock worth $188, versus its recent $360," Barron's reported. The stock traded at levels above $471 on January 11, but closed at $362.61 on Friday on Nasdaq.

The story recites the usual litany of threats to Google's business -- potential competition from Yahoo Inc. (Nasdaq:YHOO - news) and Microsoft Corp. (Nasdaq:MSFT - news) and the vulnerability to Google's advertising franchise from "click fraud" fake ad transactions. And it criticizes the wide use of employee stock compensation.

Barron's quotes several Google bears -- two Wall Street analysts with "sell" ratings on the stock, bearish investment strategist Fred Hickey and former Merrill Lynch Internet analyst Henry Blodget, who a month ago laid out a case for Google falling to $100 on his InternetOutsider blog.

The weekly also sees Google in growing conflict with book publishers, cable companies and telephone companies.

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