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With Google about to turn two this weekend, insofar as being a public company, just what has the search giant done for the marketplace in the last two years? If founders Larry Page and Sergey Brin have anything to say, it's what elementary grade Google the company has achieved so far in just under two years. "If Google were a person, the company would have been close to finishing the first grade at the time of the IPO" -- this was a quote both co-founders wrote to shareholders in 2004 as the GOOG was listed as a public company and started trading.So, what grade has Google completed two years later in 2006? Has Google graduated the sixth grade or is it just starting high school? With the search market lead the company has built up -- based on a superior product, unobtrusive advertising and very relevant results -- Google shows no signs of slowing down. In fact, it may graduate high school early and head to college studies soon.
Google's unique position in the marketplace has thrusted it into becoming one of the world's largest advertising companies. It's odd to think of Google as a direct ad agency, but that is what it is. There are no middlemen or sub-contractors -- when you advertise on Google, you deal with the company directly in almost every case. Your ads are then thrust upon the world's searching fingertips.
Today, 20 out of the 28 analysts surveyed by Thomson First Call have a price target at or above $500 for Google. Three of those targets are at or above $550, and one stands at $600. Is this analyst insanity, or is Google really worth that price? I regularly opine that GOOG shares are overvalued today at near $380 -- but $500?
What justifies that valuation per share? If Google can continue its torrid growth and really does make strides to become the world's largest advertising entity, and it gets there soon, maybe these analysts are closer to the crystal ball of the future than those who believe Google is overvalued -- me included. Only time will tell.
Brian White has worked in various executive positions in technology and telecommunications and now focuses on editing and writing.
Today, 20 out of the 28 analysts surveyed by Thomson First Call have a price target at or above $500 for Google. Three of those targets are at or above $550, and one stands at $600. Is this analyst insanity, or is Google really worth that price? I regularly opine that GOOG shares are overvalued today at near $380 -- but $500?
What justifies that valuation per share? If Google can continue its torrid growth and really does make strides to become the world's largest advertising entity, and it gets there soon, maybe these analysts are closer to the crystal ball of the future than those who believe Google is overvalued -- me included. Only time will tell.
Brian White has worked in various executive positions in technology and telecommunications and now focuses on editing and writing.
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Reader Comments (Page 1 of 1)
8-17-2006 @ 7:18PM
Investorial said...
What grade is Google in? The answer's simple.. Just look at the statement!
"If Google were a PERSON, the company would have been close to finishing the first grade at the time of the IPO." Google privately incorporated in 1998 and IPO'd in 2004 (6 years old)
So now that Google is 8 years old.. as a PERSON... they would be just finishing third grade. =)
8-17-2006 @ 10:08PM
Ann Lambert said...
In deed time will tell, your comment on the analysts "crystal ball of the future" is closer to Smoke & Mirrors.
LOOK out & listen well to some of the defense on today stinging admission of the "PayPal Killer" reported by Market Watch on Levi & co drop out “Checkout” from their site.
This is going to be some play-out in overdrive.