Altavista never developed any serious market penetration for licensing their engine. They were a really popular search site, but the engine itself never got the serious penetration (and there wasn't that much of a market for killer search engines then). P/Es have been psychotic for a decade. Google is probably slightly overvalued (most of the market is at least slightly overvalued if you're big into P/E) but not that outrageous. Google has solid revenue, very little in the way of expenses, and shouldn't stop being profitable anytime soon.
Well, you might want to talk to some of the Google insiders who have been dumping Google stock like it is going out of style.
Take for instance, Google Senior Vice President Omid, Kordestani. This person is cashing in on all the poor saps who overpaid for Google stock.
1-Jun-05 KORDESTANI, OMID
Senior Vice President 37,915 Indirect Automatic Sale at $289.92 - $292.27 per share. $11,037,0002
1-Jun-05 KORDESTANI, OMID
Senior Vice President 34,453 Indirect Automatic Sale at $288.02 - $289.84 per share. $9,955,0002
1-Jun-05 KORDESTANI, OMID
Senior Vice President 53,546 Indirect Automatic Sale at $287.17 - $288 per share. $15,399,0002
1-Jun-05 KORDESTANI, OMID
Senior Vice President 49,295 Indirect Automatic Sale at $282.99 - $287.16 per share. $14,053,0002
Google has increased in value 179.31% in the last 52 weeks. Do you really think that rate of increase will continue forever on a stock that produces no dividend?
Source: http://finance.yahoo.com/q/it?s=GOOG