Congratulations to Google at $500

Expensive?  Yes.  Ridiculous?  No.  And when describing the company's accomplishments over the past eight years, even "awesome" falls short.

Comments

[john]

Target 525 coming soon Sulfey, you idiot.

[hackticus]

Very informative post.

[Victor]

I think the potential of this company is hard to exaggerate and $500-$600 is definitely within the realms of fairly priced. I'm a bull and I'm often frustrated with the constant reprisal of silly bear arguments about Google, especially ones involving the absolute price of a single share of the stock. Having said that I think that amongst the best bear arguments advanced were those that you gave Henry, paying close attention to Google's free cash flow. On the other hand, if they ever reign in their CAPEX their earnings are going to explode.

I'll be looking forward to your analysis of the numbers for Q4. I think they're going to be a blowout.

[Neal S. Lachman]

For heaven's sake! I wished I had jumped on the Google bandwagon some time ago! Damn, this stock is hot.

From NYT: http://www.nytimes.com/2006/11/22/technology/22google.html?dlbk

"Google now has a market value of $156 billion, exceeding all but 13 American companies — icons of commerce like Exxon Mobil, Johnson & Johnson and Wal-Mart. It is worth more than any media company and all the technology companies except Microsoft, whose software empire it increasingly threatens, and Cisco Systems."

But then there is this guy who has some valid points.

I remember that some IO readers, including myself, have been critical of GOOG's forays into non-search related businesses, which would be dangerous for the company's future as it will take it's eyes off the search ball. This point is still valid, maybe even more so today than 1 year ago.

I recommend those who want to have both sides of the GOOG story to read the article (link given above). A critic's opinion:

"Fred Hickey, who writes the High-Tech Strategist newsletter from his home in Nashua, N.H., says that Google’s shares are sharply overvalued and will fall as investors notice that the company’s rapid growth is slowing.

He points out that its revenue increased 11 percent from the second quarter to the third quarter — a brisk pace, to be sure, but a lot less than the 18 percent pace in the corresponding time a year earlier.

“Google showed the sharpest revenue slowdown I’ve seen,” he said, “and nobody has paid attention.” He argued further that the company’s expenses are “out of control,” and that if the economy headed into a recession, Google’s revenue would falter and its profits plummet.

“Google will suffer the same fate that Yahoo did in 2000,” he said."

[sufiy]

In Knowledge Economy one of the most important functions is to store, organize and search all relevant and available data - GOOGLE is the best here in this Commodity business. User can always switch to another Producer of this service, competitor is just click away and switch cost is zero. But the real value will be always with content producing agents in this economy, knowledge will be important and not the transportation of it, as soon as delivery will be abundant uniqueness of any particular participant in this sector will be diminished and their valuation will be on the normal "industrial" level. Content Producers meanwhile will be starting to fight for their Copyright right, because for them it is matter of survival:
http://sufiy.blogspot.com/2006/11/google-sued-by-french-movie-producer.html

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