Google to $400?

Posted on October 21, 2005 , filed under Business Gossip, Stocks | Print This Post

GOOG, Google Inc. provides Web search and online advertising services on the Internet. It offers advertising solutions and global Internet search solutions through its Web site, and Intranet solutions via an enterprise search appliance. The company’s products and services include Google.com, Google AdWords, Google AdSense, and Google Search Appliance.

Google seems to follow the old .com mentality of trading heavily on future earnings without a long track record. There are many reasons to be excited about the company. Google has great technology, it has some of the brightest minds working for the company and future growth looks good. Google reminds me of Microsoft in its early days. They key difference between the two companies, is that Microsoft shortly established itself as a platform where people were unable to use their PC’s productively without the Windows OS. Google is also a platform, but there are viable alternatives in the search space. If Google can create some differentiating technology or service that users can only turn to Google to use, it will create a stronger user base that will trickle over to all of its services.

In the short-term, advertising spending seems to be going up and Google should enjoy strong holiday revenues. If Google is added to the S&P 500, I see the stock headed to $400. The risk to Google is the growth phase they are in. The stock price has risen so quickly that if he company releases any bad news, it will have a large impact on the stock price unlike a more established tech firm. Speculation on Google is also very strong. I do see the stock breaking $400, but longer term I expect the stock to drop down to more reasonable levels as revenue becomes more predictable.

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Pingback by RawGreed.com - Stock Updates, RawGreed Awards, Business Gossip » Blog Archive » GOOG, Google flirting with 400

2005-11-07 11:48:33

[...] On October 21st, 2005, I wrote this article predicting that Google would soon rise to $400. It looks to me like the stock will soon break $400. Googles dramatic run up following the company’s 3rd quarter earnings results has caused other search stocks, like BIDU, to rise in tide. BIDU’s rise along with GOOG is just pure speculation. [...]

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