JMP says remedies for Google Search would materially redistribute query share

JMP Securities analyst Andrew Boone notes that on Wednesday, the government submitted its Initial Proposed Final Judgement with recommended remedies to solve Google Search anti-trust. While this is an initial PFJ with plaintiffs asking for a lot, the requests do represent a worst-case scenario for Google (GOOGL) as it prevents Google from paying Apple (AAPL) for distribution, while the divestiture of Chrome and lack of payment for distribution would likely force Chrome to adopt Microsoft’s (MSFT) Bing, the firm explains. With defaults important in creating usage, this could materially shift query share if plaintiffs get the full list of requests, which would materially lower our search estimates. While Chrome could be worth about $50B, JMP believes this would destroy about $400B of market cap for remaining Google. That said, the firm expects Google to appeal the ruling while the judge will make his own decision regarding the remedies for this case as this list represents a worst-case scenario for Google. JMP has an Outperform rating on Google with a price target of $220 on the shares.