Quote:
Originally posted by Rolo@Jun 9 2005, 10:39 AM
[Good article on the Google stock, however I do not think its fair to compare Google with the other large media companies. IMO, Google is a technology company, which should be compared with Microsoft... well atleast that is the only comparison that will give hope to those who are buying Google stocks now 
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A peaceful rebuttal: I think it is more than fair to compate google to other large media companies. A company 'is' what its business 'is'. Yes, google has amazing, cutting edge, industry leading technology and R&D thats probably up there with HP, IBM and 3M. However, its plain-old advertising that pays the bills. This stock will eventually behave like other large media conglomorates. Once revenues flatten out they will become cyclical as the advertising business is heavily tied to economic growth. Yes, Google may be less susceptible because they have global reach, but, economic downturns are becoming increasingly correlated across boders, ie there is no guarantee that a downturn in US economic growth and the subsequent decrease is advertising spending will be offset by growth in non-US business.
Apart from fundamental issues (and for those of you who ascribe to efficient market theory) Here is a technical breakdown: the GOOG chart is not really all that scary. Id say it is only slightly 'overvalued' on a technical basis with a short term correction due to the $250 range (about a 10% correction). Until the long-term trend line is broken on the downside, I would say that 'irrationality' (basied on findamental valuations) is winning right now and 'the trend is your friend'.
Disclaimer: This is not investing advice of any kind, I am not responsible for anything you may or may not do after reading this
06-10-2005
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