UPDATE 1-RESEARCH ALERT-Merriman upgrades Google to neutral
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Jan 6 (Reuters) - Merriman Curhan Ford upgraded Google Inc (GOOG.O) to "neutral" from "sell" and said the Internet search giant should see some improvement in margins as it was cutting costs and going slow on its capital expenditure spending and hiring.
The brokerage also said the company increased its advertising coverage in the fourth quarter, leading to a big jump in click-through-rates (CTR) from the third quarter.
"We believe that should cushion some of the negative trends in volume and cost-per-clicks (CPCs)," the brokerage said.
However, the brokerage said this was not enough to offset the weakness in search volume and CPCs, and unfavorable foreign exchange changes.
"We would stay on the sidelines until we gain better visibility into fiscal year 2009," the brokerage said.
Shares of the company were up $4.44 at $332.49 in trading before the bell on Tuesday. They closed at $328.05 in regular trade Monday on Nasdaq. (Reporting by Deepti Govind in Bangalore; Editing by Anil D'Silva)
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