Google Valued at 80.82 Billion

Yahoo! ^

[Asphalt]

According to Yahoo Finances, and the Drudge Report, a search engine is now worth more than TimeWarner. Something seems fishy.

[discostu]

Their revenue to profit ratio is lower. And probably the biggest thing holding their stock back is that they're primarily an entertainment company and according to all the talking heads every avenue of entertainment is suffering from major drops in revenue. And what they have that isn't entertainment is old media news which is taking on water worse than entertainment. Add to that the fact that it wasn't that long ago that they needed to merge with AOL to fill some revenue holes and you can see why in our current highly emotional market T-W just doesn't look very sexy, they were in trouble in the past and look like they'll be in trouble again in the future, they just don't have a compelling story for the market.

[jdm]

"That would be may 17th, 2000 to be exact."

Thanks for the exact date. I think I still have post-traumatic stress from my investments in JDS Uniphase!!! (50 percent of my portfolio), EMC, Cisco, etc. I have never sold my JDS Uniphase. I bought in at $130 a share or so and I think right now it's under $10 / share. Too depressing to look even though I know I should sell it and move on; it's not like it's coming back to $130 any time soon (or ever!).

I'm just glad I'm still young. However, I lost so much in the market that I'm someone who will NEVER achieve a positive overall return (in the market) in their lifetime. I have a negative 88 percent return between March 2000 and present!

Before I first got involved in the stock market in March 2000, I was advised by my well-to-do colleagues that I shouldn't invest unless I'm prepared to lose 1/3 of my total investment. I could have handled losing 1/3 but 88 percent?!!!!! 9/10's???!!! I essentially was wiped out.

I'm not sure I really learned anything since now I think I have to be even more aggressive in order to get back to where I was in March 2000.

[Toskrin]

Price to Sales of over 20! Wow. That means if Google turned every penny of sales into profit, it would take you over 20 years to get your initial investment back. That assumes no growth, but is Google really going to grow enough to recoup your investment? Where is that growth going to come from? Investing in stocks like this shows the "greater fool" theory - you hope someone comes along who is willling to overpay for a business more than you.

Unlike EBay, Google does not have a lock on the market. It is conceivable that someone can come along who does what they do better, and then they're gone like that. Google did it to AltaVista and Lycos, so it can be done to Google.

But there's a problem with shorting a stock like this. You might be sure it's overvalued, but you can lose your shirt waiting for it to go down. Who knows where it will peak?

[RightWhale]

A lot of companies never come back. Maybe many don't ever go completely away, but once a company has broken out the bottom, it seems to stay broken out. Some stocks rise and fall with the general economy, but at some point they can break out the bottom and that's it. The few that do climb back take forever to do it. Something like Sears might come back, but then, it hasn't actually broken out the bottom.

[BlackRain]

Don't feel back, for I too feel your pain.

I remember day trading $200 a share stocks like it was nothing. Then one day while sitting at my computer, I said 'what the hell are you doing'.

I never lost any money trading stocks but got severely hurt in our mutual fund retirement accounts. You know the ones you paid $28 a share for that are now worth $13?

Damn you Prudential Investments! (Shakes Fist in Air).

I worry about these folks who invested heavily in Google. I have seen the down side and it is not pretty. Luckily my investments in real estate eclipsed my mutual funds.

If you remember anything about which I wrote today ---

Remember - P/E ratio. It is your friend.

[sumocide]

Trivial. It's information your browser/pc transmits every time you access some web page. It's the way the web works, nothing hahaha about it.

[Asphalt]

yeah. Still kind of weirded me out. It's cool, I've put it on my about page.

[Southack]

"Wayyy overvalued. What assets do they have? Servers, switches, etc... the really asset are the people and ideas but you can't keep the people and stay a leader forever."

I wouldn't bet against the stock. Google makes *lots* of money. Heck, they just bought their own satellite to give away free satellite photos of your home via Google maps.

Google's value isn't in its assets, either...but rather is in its audience. Google makes money selling ad space and targeted links...the larger their audience, the more their value.

Moreover, Google is kicking MicroSoft's butt...no easy feat to accomplish. Google pioneered the Google taskbar...placing Google's search box onto your Windows desktop...something that MicroSoft *should* have done years ago (something that I personally told some MS personnel directly, too). Google's search engine also dwarfs the poor quality of MicroSoft's own feeble search engine.

Then you've got Googlemail and Google home pages...

Yeah, it's an "over-priced" internet stock...but it makes no sense to Short it while it is bringing in large sums of cash each day.

Google bleeds green, not red. It's a cash machine. Google could pay *cash* for all of General Motors (~~ $17 Billion company) today and not even feel the pinch.

Why?! Because Google delivers a targeted audience to those who wish to advertise. That's something that broadcast TV can't do. Newspapers can't do it. Radio can't do it.

But Google can.

Watch for Google to come out with more and more add-on desktop products (for free), too. Better searches for your Windows desktop than MicroSoft, for instance. Automatic document updates as data changes on the public web, etc.

In fact, I fully expect Google to buy, outright, the Lexis and Nexis search engines and *GIVE AWAY* that content for free...merely to bring in yet another lucrative targetable audience (e.g. attorneys).

That announcement alone will pop Google's stock up another $35 per share.

Short that at your own discomfort...

[Conan the Librarian]

I was gonna say!


I don't know about Google Stock...but my gmail account is up to 2.3 Gig of space now.

And that maps.google.com rock!

[Koblenz]

All I have to say is...

Pets.com

Google may be an overpriced stock, but it's no pets.com. Google has sales of several billion and it's making healthy profits. Now, the stock may fall, but it's not going bankrupt anytime soon. $5 billion or so in cash.

[Toskrin]

Google is a prime example of a good company but a bad stock. It's priced based upon pie in the sky future earnings, and its future growth is far from certain. If any of those things you talk about don't happen, Google will still be around, and still be a good company, but have a low stock price.

If their earnings go up five times from where they are now (a big if), and the P/E is 20, you still won't have made a penny.

And no way could Google buy GM for cash. Google has about $2.7 billion in cash and short term investments.

[Asphalt]

oh yeah

[Moonman62]

I thought most people would have learned the last time these thin air asset companies were valued so high.

Google has had incredible earnings growth. The company itself is an asset, the value of which should be determined by the market.

Karl Marx and the Soviet Union were real big on how tangible assets were, and look where it got them.

[Moonman62]

That's is because 90% of American's don't know what 'short a stock' means.

Shorting stocks based on gut feelings is a good way to lose everthing. Potential losses are limitless. At least on the long side all you can lose is what you put in, and in an economy that's been growing for over 200 years, it's the best way to make money.

[Moonman62]

And no way could Google buy GM for cash.

And if they could and did that would be one really good reason to sell Google.

[Southack]

"And no way could Google buy GM for cash. Google has about $2.7 billion in cash and short term investments."

Google has a Billion plus Dollar per year profit stream, almost $3 Billion in cash on hand, and $80 Billion in stock...which means that investment bankers would bend over backwards to loan Google $20 Billion Ca$h for a complete buyout of an established brick and mortar company of *any* type.

GM would only take $17 Billion.

[Southack]

"Google is a prime example of a good company but a bad stock."

I agree. I'm not buying Goog...but I'm also not Shorting a company that earns $1 Billion plus in ever-growing profits each year.

[Lockbar]

I have some tulip bulbs I would like to sell for a astronomical price. Oh, I'm sorry. This isn't Holland 400 years ago.

[Moonman62]

Early 2000 taught us that P/E does matter. And matters big.

Early 2000 should have taught us that Central Banks shouldn't invert the yield curve, and that the government should keep its nose out of the economy as much as possible.

[Bloody Sam Roberts]

Sell it.

Provided, of course, it is now priced more than twice what you paid.

Just don't hold it too much longer.