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Google Businesses The Internet The Almighty Buck

Google Reports Increased Profits 192

Posted by CowboyNeal from the mo'-money-mo'-money-mo'-money dept.
typobox43 writes "According to Yahoo! News, Google has reported increased profits compared to the year-ago numbers in its first quarterly earnings report as a publicly held company. Google's revenue figures more than doubled, leaping to $805.9 million from $393.9 million. Google shares closed today at $149.38."
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Google Reports Increased Profits More

Google Reports Increased Profits

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  • Good (Score:5, Interesting)

    by metlin ( 258108 ) * on Friday October 22, 2004 @02:34AM (#10595954) Journal
    Atleast, they deserve it.

    But I just hope that after all this, Google does not turn into yet-another-evil-corporation. A lot of companies started out with benign ideals, only to be corrupted as they grew bigger and were taken over by selfish MBA types.

    I just hope that that the Google share-holders realize that what makes Google important are not just its ideas, but also the nature of their ideas.

    Kudos, Google! You guys deserve it.

    • Re:Good (Score:5, Insightful)

      by WIAKywbfatw ( 307557 ) on Friday October 22, 2004 @02:43AM (#10595999) Journal
      99 percent of shareholders invest in a company for one reason and one reason only: to make money. They don't care about ethics, doing business in a friendly manner or the warm fuzzy glow inside that employees take home with them at the end of the day, they're only interested in the almighty dollar.

      And, with the way that public companies have to operate by law in the US, that means doing whatever it takes: the boards of US companies are legally obliged to increase shareholder value as much as possible, and if that means no more Mr. Nice Guy, well, that's just tough for you, for me, and for anyone else that gets in the way of the bottom line.

      Want to know the one way to keep a company from running into these sort of hassles? Stay privately owned rather than become a publicly traded company.

      Of course, that means you can't properly compensate all the people (and venture capitalists, if any) that got you to where you are, and that presents its own set of problems including staff retention, but that's another story.

      Bottom line: don't expect Google to be your best friend from mow till the day that you die.

      • Re:Good (Score:5, Informative)

        by hunterx11 ( 778171 ) <hunterx11.gmail@com> on Friday October 22, 2004 @02:57AM (#10596042) Homepage Journal
        I would argue that Google's credo has helped them to make money far more than it has hindered them. Not pissing off your customers and planning on succeeding in the long run might be a radical idea in today's business world, but it hardly constitutes a breach of fiduciary duty.

        • Re:Good (Score:4, Insightful)

          by WIAKywbfatw ( 307557 ) on Friday October 22, 2004 @03:23AM (#10596105) Journal
          The reason why Google has succeeded has more to do with the fact that it has an excellent product rather than the fact that it is a friendly company.

          There are plenty of companies out there that have similar philosophies and that fail, you just don't hear about them because they didn't have a product good enough to stop them from failing.

          • Re:Good (Score:5, Insightful)

            by shrykk ( 747039 ) on Friday October 22, 2004 @03:30AM (#10596120)
            Yes, but part of the excellence of their product is that their ads don't piss us off. They realised you will put up with a few ads in order to get an excellent product and the day they sell out peoples private data or start bombarding us with pop-ups is the day we'll walk away.
            • Yes people will walk away if google did that but consider this; if google could make more money off selling private data and bombarding us with pop-ups even though people would walk away they would do it. Basically im saying its just luck that google happens to make the most money off being nice. If you disagree with that last sentance take a good long look at almost every other public company out there.
        • This reminds me of a couple articles I read about Costco. Apparently, Costco pays its employees quite a bit more than other discount stores, with those who've been there 2-3 years making around $40K with pretty decent benefits.

          The first article claimed that some investors were unhappy about this, because Costco's profits weren't quite as high as their competitors'.

          But the second claimed that Costco is one of the companies that is holding its own against Walmart, because customers like the fact that the e

      • Re:Good (Score:5, Interesting)

        by metlin ( 258108 ) * on Friday October 22, 2004 @02:59AM (#10596051) Journal
        I know exactly what you mean.

        I'm the co-founder of a small technology startup, and it is for this very reason that we do not want to look out for VC investment.

        But the unfortunate problem is that VC investment is quite inevitable, especially if you want to grow. And once VC investments come in, they would most certainly insist on an IPO, because that increases their profit margins, too.

        That's a vicious circle - it's very hard for an entirely privately held company to make it big. The biggest thing that VC investments bring in is not just the money - it is the contacts and the pedigree. If you are a company in whom Vulcan or ING Barings have invested, then you must be good.

        That brings in more business, and you grow. So yeah, I can pretty much relate to what you're saying!
        • And once VC investments come in, they would most certainly insist on an IPO, because that increases their profit margins, too.

          B.S. The new paradigm is to flip it quick i.e. Lookout sells to MSN, Oddpost to Yahoo, (insert name here) to Cisco instead of waiting for the possibility of an eventual IPO.

          If you VC is insist on you going IPO, then your VC is an idiot and so are you for succumbing to quick cash.

          • Actually, no - we are not looking at VC money. That's the point I was trying to highlight there.

            Although we could, we're not - we're just sustaining ourselves on services projects for the moment.

            This was just something that some of the VCs that we had talked to had indicated to us about, nothing more :)
      • You imply that companies have a choice in the matter: stay private, go public. Google had given out share options and reached the maximum number of shareholders that a private company can have (500, iirc). The IPO was a legal requirement. I don't think, but I may be wrong, that boards are legally obliged to increase shareholder value; they are obliged to answer to their shareholders, but this can mean many things. For instance, taking a long-term view to value can often mean being less pushy in the shor
        • Actually, that wasn't the reason for the IPO (according to a Newsweek report I read some time ago).

          The reason was they would have to present their accounting books to the Administration, since they have gone over some profit limit (or something like that). The funny thing is, if they really wanted to keep the company out of Wall Street's hands, they could have just incorporated it (I think that's the term for a private society-owned company -the Spanish term is sociedad limitada-) and they would probably

      • The boards of US companies aren't legally obliged to increase shareholder value; they're obliged to do what they say they'll do in the prospectus. Most companies say that they're a good investment and they'll increase your value. Google says that shareholder value isn't a concern of theirs, and investors who want to affect company policy can kindly take their money elsewhere.

        Companies normally become publically traded in order to raise investment money, which requires attacting investors with promises of f

        • The boards of US companies aren't legally obliged to increase shareholder value; they're obliged to do what they say they'll do in the prospectus.

          It's good to know that everyone who posts about how publically traded companies are legally obliged to increase shareholder value, and then goes on some rant, doesn't know what he is talking about.

          Useful for skipping worthless comments.

    • Re:Good (Score:5, Interesting)

      by DigitumDei ( 578031 ) on Friday October 22, 2004 @02:58AM (#10596049) Homepage Journal

      Correct me if I'm wrong, but as I understand it the only way Google makes money is via paid ads. And the best way for them to sell those paid ads is by having tons of free applications that people WANT to use.

      I think, in the industry they're in (that is search and anything they can link search to), that it really is in their best interests to NOT become yet another corporation. If they did, MS would eat them alive in no time.

  • finance.slashdot.org (Score:5, Insightful)

    by Anonymous Coward on Friday October 22, 2004 @02:34AM (#10595956)
    Tune in tomorrow for the earnings reports from railroad and textile companies, and we'll discuss whether Amazon P/E ratio makes sense to hedge funds managers.

    Thank you for being with Slashdot Finance. Buy LNUX!

    • Re:finance.slashdot.org (Score:4, Informative)

      by metlin ( 258108 ) * on Friday October 22, 2004 @03:11AM (#10596081) Journal
      Actually that is not necessarily a _bad_ idea.

      There are a lot of stories here on Slashdot that would qualify - this one, for instance. And I'm sure there are quite a lot of geeks out there with enough and more knowledge of finance.

      Hey, if we can have IANAL, why not IANAE (economist) and the like.

      Personally, I think finance.slashdot.org would be a good idea.

      • Re:finance.slashdot.org (Score:5, Funny)

        by leereyno ( 32197 ) on Friday October 22, 2004 @03:25AM (#10596113) Homepage Journal
        At the very least we'd be sure to hear some great war stories about .com's that went .bomb.

        www.petfood.com... Why buy your cat food at the grocery store for $6 a bag when you can buy it online for $3 a bag and only pay $6 to have it shipped to you.

        www.linuxone.com: Proof that imitation is the sincerest form of flattery. Would you believe I actually have a beta of their distro that never saw the light of day! I'm going to have to dig that up sometime...put it on my website.

        Lee
        • Proposal for a conspiracy theory:

          Prove that the dotbomb was a terrorist plot (you could call it "suicide-dot-bomb") to hurt the US economy.

          • Re:finance.slashdot.org (Score:3, Interesting)

            by metlin ( 258108 ) *
            On the contrary.

            The DotCom boom was necessary for the Internet to be made popular and the new technology economy to settle in.

            There was simply no other way - it was just a means of the new economy setting in, and the dust is beginning to settle now. It could not have happened any other way - this is the only way large scale adoption would have been made possible.

            And so, contrary to any and all assumptions, it has done a lot of good than bad. Today, despite anything, the US is numero uno in IT. If stupid
            • Here goes my chance of making millions by selling half a dozen books (all with a different title but practically identical contents) full of logical fallacies, incoherent sentences, and forgeries. Eh.
            • So yeah, the DotCom has indeed done a great deal of good, too!

              Yeah, some of us were foresighted enough to demand cash paycheques to go along with our "stock options"..

              It's just too bad some people got blinded by the possibility of being millionaires within the next 1-2 years and lost everything.
          • Prove that the Bush administration was a terrorist plot to destroy the US economy.

            Easy to do, there's [futuresource.com] evidence [nytimes.com] everywhere [washingtonpost.com].

  • That's how IPOs goes (Score:3, Insightful)

    by Dancin_Santa ( 265275 ) <DancinSanta@gmail.com> on Friday October 22, 2004 @02:35AM (#10595967) Journal
    Say you have a bank account. You are suddenly inundated with tons of cash (almost 2 billion dollars worth!) because you pimped yourself out. Then you stick all that cash in the bank account.

    Even at a very low interest rate you can get a significant return on that money.

    Obviously, you'd like to do stuff with it like buy jet planes for your managers and little stickers and baseball caps for your engineers, so your total return will be less than expected. But in the end, your huge pile of cash garners you a very nice gain just at basic interest rates. Couple that with some savvy investing (no-load mutual funds!) and you can have yourself quite a bit more "revenue" than before you sold yourself out.

    • Re:That's how IPOs goes (Score:4, Informative)

      by bsdfish ( 518693 ) on Friday October 22, 2004 @02:42AM (#10595989)
      Ok, lets crunch some numbers:

      2 billion * 1/4 (one quarter) * 5% (much more than you can get through safe investments) = $25 million. And how much did Google's revenues increase by? $400 million?

      • Re:That's how IPOs goes (Score:4, Informative)

        by dasunt ( 249686 ) on Friday October 22, 2004 @04:58AM (#10596324)

        2 billion * 1/4 (one quarter) * 5% (much more than you can get through safe investments) = $25 million.

        IANAA[0] but, the Vanguard 500 Index Fund has averaged about 12% annually[1]. Some market indices have been remarkably stable in the long term, and the overhead for a mutual fund tracking an indice is rather low, due to the simplicity of the fund. However, while such a habit of investing has been relatively safe in the long term (say, 20 years down the road), in the short term the returns are relatively unpredictable.

        The problem with "safe" investments is that, in the event of massive inflation, the actual return isn't so "safe". Imagine what the inflation of the '70s did to "profits" from bonds.

        [0] I am not an accountant (and thus this is not investment advice)
        [1] Past performance, of course, is no guarentee of future performance.

      • If the only way Google makes money is by investing their IPO cash, the stock would be worth about 10 to 15 bucks a share, tops. Why would you give money to a company if it was planning on lending it (or investing it)? Why not just invest it yourself and save on overhead? You think Google is better at managing money than Fidelity or Morgan Stanley? Of course not!

        Google uses the money that we gave them to finance its growth. Its price/earnings multiple is so high because investors have expectations that the
    • I don't think "basic interest rates" can give you a very nice gain.
      I consider 0-5% for an investment poor, under 5-10% is okay, and over 10% is very good, but I'm conservative.
      Assuming google did have 2 billion in the bank, at even 10% bank interest, that is only $200 million, with a market cap of 40 billion, that is works out to 0.5%, not even enough to cover the brokers commission when you buy the stock.
    • The interest generated by cash in the bank is reported on earnings statements. As you can read here: http://www.sec.gov/Archives/edgar/data/1288776/000 119312504175503/dex991.htm , the interest generated was 3.8 million for the quarter. Not even a drop in the bucket.

    • Obviously, you'd like to do stuff with it like buy jet planes for your managers and little stickers and baseball caps for your engineers

      It is frightening how accurate that is...

  • Glad to see it (Score:5, Insightful)

    by Bill_Royle ( 639563 ) on Friday October 22, 2004 @02:38AM (#10595977)
    Despite the guaranteed criticism any company that "makes it" gets, I think Google's a good example of good ideas paying off.

    Do I worry that they'll become another Microsoft or Oracle? Sure - but the best way to prevent that is to support the good that they do, while expressing directly to their feedback lines [google.com] the things you don't like.

    Thus far, they seem to be listening. I hope they keep up the good work!

  • Sorry, I have to... (Score:5, Funny)

    by Anonymous Coward on Friday October 22, 2004 @02:39AM (#10595982)
    Step 1: Free search engine
    Step 2:
    Step 3: Profit!

    Hell, it worked!
  • For the life of me I don't see how Google can be worth this much. Yes, the profit is pretty darn good (and deserved), but its market cap is just absurd right now.
    • I've got to agree, this smells of dot-com euphoria. The company has a market cap of 40bn on 52mn of net profit. Despite all the good things google is doing, their core revenue comes from web ads which is a fickle business. They've done a hellofa job, providing a better product (web ad delivery) than anyone else has before, but it sure is a risky lifestyle. I'd really be interested in overall click-through rates.

      I haven't seen anything that will create a more solid/reliable/long term revenue stream yet. I'

    • "A business is only worth the profit it will generate from now until doomsday, discounted back to the present, adjusted for inflation."

      So there.

  • And since they're a business... (Score:5, Interesting)

    by physicsphairy ( 720718 ) on Friday October 22, 2004 @02:54AM (#10596032)
    I wonder what they're going to do with the extra money?

    As far as the search engine wars go, well, I think they've pretty much been declared the winner for now. It will take something very innovative and different from existing engines to have a chance at dislodging them.

    So maybe that's where you see things like Gmail and Google Desktop Search coming from? Theres not a lot of room to expand in the search engine arena; not a lot they can do other than branch out into places where there's more room to innovate and expand.

    • I wonder what they're going to do with the extra money?

      What "extra money'? When a stock price goes up, the company doesn't get a penny. A company could issue yet more stock at near the newly high price, but that isn't what's happening here.

      As far as the search engine wars go, well, I think they've pretty much been declared the winner for now

      Please see: AltaVista, Yahoo!, Netscape, and InkTomi all of whom were declared "the winner for now" back in their respective days. Of these, only Yahoo! h
      • What "extra money'? When a stock price goes up, the company doesn't get a penny. A company could issue yet more stock at near the newly high price, but that isn't what's happening here.

        If you read the excerpt, "Google has reported increased profits compared to the year-ago numbers in its first quarterly earnings report as a publicly held company. Google's revenue figures more than doubled, leaping to $805.9 million from $393.9 million". I hope that answers your question. The only part of the excerpt that

    • Turbo10 did appear to have some innovative ideas with the deep net concept, in particular going deeper into online databases most search engines were passing over. Not sure where they are on the success curve though.

      They tended to fail in my book because:

      - their web page are ugly and complicated, dark purple yuck
      - You have to have javascript enabled
      - Web page doesn't work in Konqueror so I stopped using it.

      They generally made searching a little to complicated when everyone is just used to typing in keyw

  • Damn! I knew I should have bought some GOOG... (Score:3, Interesting)

    by fugas ( 619989 ) on Friday October 22, 2004 @03:05AM (#10596064) Homepage
    To be totally accurate, GOOG soared even higher, to 161.79 [yahoo.com], in After-Hours trading. That's a nice 14.67% increase over the previous close.

  • Don't take this as a troll, but.. (Score:4, Insightful)

    by mumblestheclown ( 569987 ) on Friday October 22, 2004 @03:10AM (#10596075)
    • Closed source
    • Multi-Billion dollar corporation
    • Single point of information control
    • Monopolistic Practices
    • Secretive
    Explain to me again why we should be cheering for them? Yes, it's a useful service. But MS stuff is likewise useful (despite what many of you think). So what if it's free for you to use? They still have a business model.

    The best thing I can say about google is that it is unsustainable. Consider if the company is worth X billion dollars now. Well, even the most armchair businessman here will tell you that it wouldn't take a billion dollars to build a duplicate google system. It wouldn't even take a twentieth of that. And, while google is nice and popular now, if a better search engine came along with slightly fewer ads or whatever else perceived benefit, it would seriously erode google's traffic and cause actualy *gasp* competition and choice for advertisers.

    and no, Yahoo and its overture systems are not an alternative.. they are a different service that targets different markets.

    What I am suggesting is that google is selling a very generic, easily duplicatable service if somebody just got the funding to hire the right engineers. Google knows this.. that's why they are trying very hard to build all sorts of peripheral stuff like gmail and so forth, but the fundamental (99%+) business is still the search engine.

    • Re:Don't take this as a troll, but.. (Score:5, Insightful)

      by mpoulton ( 689851 ) on Friday October 22, 2004 @03:31AM (#10596121)
      it wouldn't take a billion dollars to build a duplicate google system. It wouldn't even take a twentieth of that.

      Really? They have a LOT of hardware. Lots of it. It's specialized, too, not all off-the-shelf stuff. More importantly, though, they have intagible assetts worth much more than their equipment -- code. Googlecode is about as non-trivial as it gets. To write it all, they have some of the smartest engineers in the world, and those engineers aren't cheap. Just as important as their technology itself, they have a massive user base that no other search engine can match without years of media exposure and word-of-mouth. They have an established reputation for fairness and avoidance of underhanded manipulation of results. I believe those factors make it impossible to compete with Google in the short term, even if their hardware and code could be replicated for a few hundred million dollars (a more likely figure than $50M).

      Investors like short-term results. Try telling your VC's that they should invest $150M in a search engine project that replicates something already in existance, and won't be a moneymaker for at least 5 years. Think they'll bite?
      • Investors like short-term results. Try telling your VC's that they should invest $150M in a search engine project that replicates something already in existance, and won't be a moneymaker for at least 5 years. Think they'll bite?

        Sure they would. Five years is only unreasonable for such aproject if you have a dot-com mentality. Five years is perfectly normal.

        But the real question is whether you could convince them to invest into making a market competitive. In this case, I think they would, since goog

        • you can't compete with google. they've bought every single engineer with a phd in modern information retrieval.
      • >> I believe those factors make it impossible to compete with Google in the short term, even if their hardware and code could be replicated for a few hundred million dollars (a more likely figure than $50M).

        I, quite frankly, don't buy into any of this. I believe that Microsoft is currently the biggest threat to Googles search monopoly. Their intention has always been to control as much of the users internet experience as possible. I think MS missed the Internet boat with XP, and hence allowed a lot o
    • Well, I find it hard to cheer for a convicted monopoly and market bully. I think the industry atmosphere after the DoJ let MS off easy has been such a hinderence to innovation and startups that its been a disservice to the economy on the whole.

    • Re:Don't take this as a troll, but.. (Score:5, Interesting)

      by TinyManCan ( 580322 ) on Friday October 22, 2004 @04:23AM (#10596247) Homepage
      As someone involved in large Enterprise Scale operations, I can say that Google has certainly done something that is not easily duplicated. They managed to get an application running on 10,000 servers that could easily handle a load and dataset that is massive.

      Google's strength is not in their search engine, or in gmail, but their ability to execute new appications in a highly available and supportable manner. Google has developed an Operating System for the web so to speak that is head and shoulders above any other system out there currently.

      If Google continues to keep delivering solid and functional applications that meet my, and other users needs, we may see a future where the only OS you need on your local computer is a web browser.

      That is why this stock is going through the roof. This company has capital, resources and manpower to deliver a Microsoft Killing blow, and is aquiring the skillset and experience needed to pull it off each day they run 'the worlds biggest application.'

    • Where's the evil? (Score:5, Insightful)

      by JaredOfEuropa ( 526365 ) on Friday October 22, 2004 @05:02AM (#10596330) Journal
      Closed source
      So? I can see why they wouldn't want to be too free with their search engine technology. For once, someone might easily duplicate it, but more importantly, people might exploit inside knowledge of the system to bump their own webpages up in the ranking. Pageranking has to rely on certain 'tricks' rather than a fully objective and fair mechanism, and in this case, obscurity is way to go.
      Multi-Billion dollar corporation
      I don't see this as a reason to stop cheering for them. Nothing wrong with financial success.
      Monopolistic Practices
      The question is: do they simply have a monopoly on certain things, or do they use their monopoly to illegaly control prices or keep out competitors? For one, I don't really see where the monopoly is... advertising? I wasn't aware that advertisers have to go through Google these days...
      Secretive
      See my first point.

      Google has a good and eminently useful core product which they provide for free. They make money off ads like so many free web services, but they choose to do so in a rather low-key manner. In addition they are starting to offer other free services, not by copying the competition, but by listening to the customers and raising the standard for everying else. Compare GMail to other free email services, and you'll see what I mean.

      I guess many people are cheering for Google because this appears to be a company with good ideas, but also with good ethics, a drive to do things right, and attention for their customers; qualities that other companies often see as cost centers and something that they have to pay lip service to, to further their public image. With Google it seems that these very qualities are the things that made them succesful. It's nice to look at a company that works because of these good practices rather than despite them, because it reinforces our belief that the world works as it should, and that the good guys can finish first. (Yes yes, it sounds melodramatic, but I don't really have any other way to put all this).
    • But MS stuff is likewise useful...

      I don't think so. A "Google by Microsoft" would be cluttered with assistants, "you have new ..." messages, ActiveX components, and vulnerabilities.

      Google loves simplicity, while most applications M$ releases look bloated and ugly. They may be good marketers, but their products are technologically mediocre, and they've got no style.
    • Why should I cheer for google? Because they have an awesome product and have done great things for our community.

      Why should you be so sour at google? Because they did it, and you didn't? Because they're brilliant, and maybe you're not?

      Go and "duplicate" their service, I dare you. You stand no chance.

      Google deserves every dollar they make, because they are the best ones doing it. Until you or anyone else can beat them, then put up or shut up. Or don't support them. I gladly will.

  • "Phase 2" (Score:4, Insightful)

    by Vollernurd ( 232458 ) on Friday October 22, 2004 @03:25AM (#10596109)
    Google's recent run of new products and financial results is starting to remind me of that old Onion story about how "Starbucks Starting on Mysterious 'Phase 2'". All their outlets were closed and boarded-up and Starbucks management were readying their mind-control devices.

    Now Google is getting ready for its own "Phase 2" having made me sign up for Gmail, that desktop search thing, etc.

    Time to put my tinfoil hat back on.

  • Yahoogle (Score:5, Interesting)

    by zobier ( 585066 ) <zobier AT zobier DOT net> on Friday October 22, 2004 @03:27AM (#10596115)
    Has anyone else noticed the similarities between this [yahoo.com] and this [google.com]? Hell, it even has the 'did you mean' and calculator features!

    • Re:Yahoogle (Score:4, Insightful)

      by Anonymous Coward on Friday October 22, 2004 @03:47AM (#10596157)
      Holy crap!

      Hey, if Windows can sue Lindows just cause it is spelled similarly, cant Google make them stop doing that?

      I mean that is almost identical except for the logo change.
    • Yeah, but they don't have built-in FedEx tracking!

      I just wish I would have bought more GOOG. I bout 2 shares on IPO day... $100.xx.... not too bad a return so far, but to think at this rate I could have sunk everything in and made some bank....

      yeah yeah OT

      • Google has potential, but at the same time, there is nothing to prevent the share price greatly declining in value after the peak [yahoo.com].

        Note how that linked graph is logrithmic -- if you bought Yahoo at the top (say, around $120/share), your investment would have declined to just over $35/share.

        Two questions you might want to ask yourself is how risky is google's long term future, and if you are investing for the short term, can you predict google's peak and get out near enough to it to justify the inves

    • I'll see your Yahoogle [yahoo.com] and raise with a Microsoogle [msn.com]
  • $161 in after market trading you say? (giggles like a little school girl upon realizing that my google shares is now worth double within a month)

  • My Ad Was... (Score:3, Funny)

    by darkmeridian ( 119044 ) <william.chuang@NOSPaM.gmail.com> on Friday October 22, 2004 @07:15AM (#10596873) Homepage
    ..A google ad saying "Can you boost the profitability of your business?"

    I don't know, google, can I?

  • Still overpriced (Score:3, Interesting)

    by Fished ( 574624 ) <amphigory@@@gmail...com> on Friday October 22, 2004 @08:10AM (#10597163)
    Disclaimer: I own some GOOG, and I've done pretty well with it.

    But I wouldn't buy any more at current prices. Even with a 100% increase in profits (which is what they've done) they're trading at a P/E of 180. My general rule is that the earnings growth needs to be less than or equal to the P/E - which means I'd buy GOOG at a P/E of 100, or maybe even 120. (The odds change a bit when earnings growth is truly phenomenal.) But 180 is overpriced by 30-40% at least. Worse, I think that we have to expect their earnings growth to slow down a little in the next few years.

    You can't make money in the long run by overpaying, no matter how good the company is.

  • Several ways to look at this (Score:4, Insightful)

    by bigberk ( 547360 ) <bigberk@users.pc9.org> on Friday October 22, 2004 @08:19AM (#10597222)
    Given the way the stock price has increased, I think many of us were correct when we identified the blatant poo-pooing of google's IPO as a deliberate strategy by the organized "analysts". It seemed out of place at the time.
    • Rule #1: Analysts are full of shit. They always have been, they always will be. You should have gotten suspicious when you kept hearing 'headlines' about experts warnings against GOOG. Do not ever act based on analyst opinions you see on finance.yahoo; recommendations on CNN, CNBC. Take these opinions with a scoop of salt.
    • Rule #2: The periodic earnings report mean next to nothing. You think I'm joking? Ask any real accountant. Periodic financial statements are not audited, nor do they reflect an entire operating cycle. Expenses might be deferred to later on. The real story is to be seen when a year or two has passed. After such a period, you will have seen two audited reports and the period is sufficiently long that revenues and expenses can't be shuffled to look favourable. In other words, if something bad is happening it can't be hidden forever.
    Those are my recommendations, as an accounting student and someone who has done decently with market investments.

  • gBay? (Score:3, Interesting)

    by GeorgeH ( 5469 ) on Friday October 22, 2004 @09:09AM (#10597641) Homepage Journal
    Did anyone else notice that both Google and eBay posted $805.9 million in revenues [yahoo.com] in Q3? (spotted at Signal vs. Noise [37signals.com])
  • Annualized earning of $208M with cap of $45.59B. Sounds like a classic InterNet bubble to me.
  • yep, they slashed all the RELEVANT results with the vanilla update, so all those who are serious now have to fight over $1+ US /click on googleads.

    They make extra with adsense too ...

    in the meanwhile I tend to search on yahoo more and more since on google the usable results fall back on the 10+ page range many times ..

    I really keyword/title my sites so it is relevant to the search and content, and still I see results that are not even about the subject ....
    seems that they are using a "reverse ranking" t
  • its all Roland's fault. I you google for "roland piqu"...not even the whole name, the top link returned is roland's ratings [xmlstoragesystem.com]. The guy is on a quest to draw more hits than cnn.com but as a side effect of nobody remembering how to spell his name, the lookups pump a lot of traffic through google.

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