Comments on: Google – overpriced?

By: sk

sk — Fri, 01 Dec 2006 17:01:59 +0000

What I don’t understand about Google is, who clicks on those text ads. I use Google search all the time but not once have I clicked on the ads. I had asked some other people about it and most of them don’t either. Now Google is not going to release these details but I’m interested in knowing how much of their revenue comes from their searches and how much from ads on third party sites. My guess is that typo-squatting and click-fraud constitute a significant portion of their revenues.

There is tremendous pressure on Google to continue growing and beating Wall Street estimates. 2-3 bad quarters may be all that it takes for a Web 2.0 bubble burst. For the record, I don’t mean Google will fold up or that it will collapse. In fact, Google will remain a major force in the industry. The smaller companies will bear the brunt of this.

By: Cotton

Cotton — Fri, 01 Dec 2006 06:29:00 +0000

EPS is not the only way to measure the value…I said that it is one of the many methods that you can use…
Current price is not the indicator of future earnings. You would be in the same position knowing today’s price as you would be by knowing other historical prices.. (Efficient Market Hypothesis). This is because all known information has already been embedded in the current price. So how can it possible act as an indicator of future earnings?
I didn’t use the geometric average of “market growth”. I used the geometric average of historical stock returns. There is a big difference. How can I possibly use the market growth average to find the intrinsic value of a particular stock? It’s not possible. So..why would I use the geometric average of google’s income? This would amount to using historical prices to predict future prices again..which goes against the hypothesis.
Yes, I agree that Google will eventually have a flat growth curve..it is the case with every other company as well. Right now it is experiencing an abnormal growth rate… which will turn into a normal growth rate after a couple of years. I don’t know exactly after how many years… we need to wait and watch. Infact, most of the value of the stock is due to the PVGO (Present Value Growth Opportunities). I can show you the deduction if you want. I wanted to put it up in my blog..probably I will by this weekend. As much as $400 out of $500 approx. is due to the growth rate of the firm. It may be overpriced, but yes, it is definitely growing at a staggering rate for now.
It will be interesting to see when the stock split will be announced! I guess the prices will climb up again after the split is announced.

By: Tabula Rasa

Tabula Rasa — Fri, 01 Dec 2006 00:45:43 +0000

Yeah!
But to be honest….is EPS only way to measure the value of investment??
And also, current price is an indicator of future earnings. If you willing to use geometric average of market growth. Would consider using Geometric Average of google’s income??
With google, there are guys who think google will eventually have flat growth curve and end up as good company and there are guys who think google will end up with greats!!!
I believe in later.

By: parmanu

parmanu — Wed, 29 Nov 2006 12:33:19 +0000

“..(with inputs from cotton) ..”

ahh…no wonder this post is not making any sense to me..

you started with a number around 500…went as high as 1000, did something unholy and ended at 80 dollars..

*shudders*..these financial people…!