google at $2,000? - nah!!

When Andrew Feinberg wrote the following, I quickly replied with my thoughts, below.
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Google at $2,000?

By Andrew Feinberg
January 06, 2006

I promise I won't write about Google on Monday, but today I simply can't avoid it. While thinking about Google, I take the plunge on Yahoo.

I don’t really want to mention Google (GOOG) that often, but then circumstances always intervene. It’s embarrassing for a value guy, but what the hell? The stock up $17.07 today to $468.31, another all-time high. One of the catalysts for the move is a Street.com piece about Caris & Co. analyst Mark Stahlman’s view that Google “could” reach $2,000 per share, if it claims a reasonable portion of its total addressable market. Stahlman says the digital-services market is currently worth $2 trillion and has the potential to expand to $10 trillion per year. The piece is worth reading, especially if you are bearish on the stock. I think it’s crazy to short Google, and not just because I happen to be bullish. It’s always nuts to short a stock simply because you think it’s overvalued. You need a catalyst to help drive the price down. And there is no apparent catalyst on the horizon. Google’s potential is enormous, and it’s impossible to know with certainty that it will fail to reach the high targets set by the bulls.

Stahlman makes it clear that $2,000 per share is not his target. But it might be truly achievable. As I’ve said before, Google could become the most valuable company on earth. As far as I can tell, the company keeps doing everything right. That’s a very impressive sign -- and it’s not something that has ever been said about Microsoft (MSFT). I also like the Bear Stearns analyst’s comment earlier in the week that Google is creating its own “ecosystem.” That may not be a bad way to think about the company. I enjoy spending time in the Google ecosystem. Experience has told me, on the other hand, that I want to spend as little time with Microsoft as possible.

As a writer and a money manager, using search has changed my life. And I associate that positive change with Google. It reminds me of Warren Buffett’s comment decades ago that one of the great brand benefits of Coca-Cola is that people associate having a Coke with happy childhood memories. And Coke turned out to be a great stock (KO) -- until it ran into a wall that even happy memories couldn’t knock down.

Given Google’s recent romp, the shares of Yahoo! (YHOO) -- which have had a much less dramatic move -- seem more and more attractive. After owning some for clients for many months, I finally took the plunge and bought some for me this morning. Someday soon, a leading financial publication will have to run a piece titled, “If You Like Google, You’ve Got to Love Yahoo.” It will make particularly enjoyable reading to those of us who own both stocks.

Positions: Long GOOG, YHOO; long MSFT in certain client accounts.
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Reply ....

Terrific post!! But, I'm not so sure?

< You need a catalyst to help drive the price down. And there is no apparent catalyst on the horizon. >

Watch out for movement from publisher/media Co's in the next few weeks or, so .....

It has been said that "Content is King" and newspapers, magazines & TV web sites already have that content, and have (collectively), many many "users"/eyeballs.......

By networking their content, and "sharing" those "eyeballs" amongst each other, they WILL not only retain existing advertisors, they will soon start to regain some portion of those, already lost to Google, Yahoo and others ....

The print/media world do have an existing massive audience that (interactively), they can "drive" to their many websites, as a "collective", or, by using network type methodology. National "efforts" can involve readers all over the country. They are a force to be reckoned with... The recent "dip" in GOOG's shareprice value, was testimony of their punitive power, IMHO. (china ?). And Google will co-operate, too .... (The growth of the Net is accepted, as almost unstopable. Current "hype" is purely a distraction, I feel).

< Google Network Revenues -- Google's partner sites generated revenues, through AdSense programs, of $928 million, or 41% of total revenues. This is a 59% increase over network revenues of $584 million generated in the first quarter of 2005 and a 16% increase over fourth quarter 2005 revenues of $799 million. >

UMMmm?? UP 16% on their Q4-2005 figures. (And TAC represented an approx. 78% or 32% of advertising revenues!!)

FWIW ....You may find this an interesting read .... But only MHO, of course.....



http://finance.messages.yahoo.com/bbs?action=m&board=22689351&tid=look&sid=22689351&mid=157681

Just my thoughts, only.

:)
LC