Google Inc. stock opened strong on Monday while Yahoo! plunged 20%. Google stock opened with a wide positive gap at $599. The stock touched an intraday high of $599 and a low of $581.29. At 10.49 am ET, the stock was trading at $594.90 and 2.59 million shares changed hands.

At current market price and EPS of $14.23, Google is trading with a P/E of 41. The stock is fairly priced at current levels and we may see re-rating from major technical analysts soon.

Microsoft backed off from its $33 per share bid for Yahoo takeover. The company CEO Steve Ballmer recently announced that the deal couldn’t be completed as the management of both companies couldn’t reach an agreement. Yahoo! board was asking for $37 while Microsoft wasn’t ready to pay more than $33.

Technical experts believe that this may open chances for Search Engine major Google to buy stake in Yahoo!. Online media and search giant Yahoo! can offer many benefits to Google. Google may capture a bigger pie of Search Engine search traffic and Search Advertising market. Google will also get access to a huge user-base of Yahoo! online website, email and messenger service.

Had Microsoft been able to acquire Yahoo!, things would have become little difficult for Google. Microsoft would have acquired more share of online search market. The company has been trying for a very long time to capture more online search users, but hasn’t found much of success with MSN Live Search.

Technical Analyst Stifel Nicolaus has raised the price target for Google from $610 to $675.