Google Takes Top Spot From Time Warner

newfoundry writes "BBC News reports that Google hit $80bn on the NYSE yesterday, so is now worth more than Time Warner..."

Comments

I think this calls for a googlegasm

[strongmace]

unnnhhh yeah oh baby ^^the googlegasm

Re:I think this calls for a googlegasm

[Karzz1]

This is not really all that surprising. Google has developed a loyal following amongst its users by:
1. Not suing their customers
2. Providing value (not a bunch of recycled crap)
3. not being evil.

I am sure there are many more reasons why Google is a "better" company than Time-Warner, however they escape me right now (disclaimer I am very tired and recovering from strep throat).

Re:I think this calls for a googlegasm

[dbleoslow]

No definitions were found for googlegasm.

Suggestions: - Make sure all words are spelled correctly.
- Search the Web for documents that contain "
googlegasm"

I don't think that's correct. Google doesn't turn up any definitions for it.

Re:I think this calls for a googlegasm

[anaesthetica]

The most amazing thing about this meteoric rise is what it says about a capitalist society. We hear a lot of moaning on Slashdot and elsewhere about how the Big Corporations are going to be around forever, and buy up every other corporation, and kill innovation. What people consistently fail to realize is that small companies are constantly rising up to destroy the old ones.

If you look at the list of the top 100 companies from 50 years ago, a majority no longer exist. If you look at the top 100 companies from 100 years ago, maybe, maybe 5 are still around. All the "big" corporations of today are supremely mortal. And their biggest vulnerabilities aren't to their main competitors, but to the small innovative start-ups, like Google.

Think about it: these two guys did some groundbreaking research, built something useful around it, and tailored the technology to their consumers needs. Now they are the highest valued media corporation, bigger than the goliath consolidated media giant AOLTimeWarner. Suing one's customers, buying Senators to write legislation for you, and being generally evil are not signs of impending oligopoly, but signs that the old dinosaur companies are going down the tubes, and will be devoured by a new wave of small companies.

Re:I think this calls for a googlegasm

[fireboy1919]

Yeah, and what's great about the universe are:
1. Time
2. Space

Your #2 and #3 are broad, far-reaching categories that actually contain numerous reasons why Google is a better company. #1 is actually part of that, #3, by the way.

I would change #2 to be "providing services their customers want."

There are doubtless many manure companies that consider recycled crap to have lots of value.

Re:I think this calls for a googlegasm

[RyuuzakiTetsuya]

Results 1 - 10 of about 118,000 for Recycled Crap. (0.16 seconds)

Re:I think this calls for a googlegasm

[NoMoreNicksLeft]

I think you misunderstand. We don't rail against the eternal corporation, they do indeed die. Often times, this is not a good thing though... it usually means they were killed by an even worse corporation. It's like locking 1000 psychopaths in the room with guns and knives, the ones that are left are the *worst* of the bunch.

All you are saying is that some of the psychopaths are female also, and assuming that they fuck around enough, babies are born. Gee, I wonder how that kid will grow up, eh?

The incredible thing here, is that with Google, that analogy has failed. Here's a company that at least as of now is *not* a psychopath. Some of us are so cynical wonder if it is one, but hides it well, others figure it's only a matter of time before it becomes one even if it isn't already.

This isn't a shining example of the success of capitalism, rather, it's an exception to the rule. Capitalism shouldn't be a religion, the invisible hand might have been gentle at one time, but now it rarely ever even gives you a reach-around.

Re:I think this calls for a googlegasm

[Anonymous Coward]

Um wrong.

1. You cannot compare 100 years ago to today. DMCA, invasion of privacy, etc

2. Corporate culture is a lot more organized now. Again, you cannot compare to what it was 50 or 100 years ago. The idea of lobbying and political donations is now an integrated part of strategy

3. The government has no balls now. Rockafeller was broken up. AT&T was broken up. Microsoft, proven to be a monopoly, was lightly slapped on its ass (more like a pat really)

4. IP and lawyer culture. There are companies being specifically made to gobble up patents

Re:I think this calls for a googlegasm

[anaesthetica]

You certainly can compare 100 years ago to today. There has been no fundamental revolution in the way business is done or organized--incremental changes to the rules don't comprise some sort of historical discontinuity.

I think you underestimate the level of power that was once directly wielded by corporations. All you need to do is read a book about the Robber Barron era and you'll see what they got away with. They rather openly bought and sold Senators, rather than the timid influencing with perks and donations that corporations are allowed today. They could (legally) raise private militias and use them against other U.S. citizens if they unionized or agitated.

Our government rightly broke them up. Microsoft doesn't nearly have the power that the old corporations once had. Not even close.

The successor corporations have all declined. As they grew weaker they had to enter into mergers, rebrand themselves, get bought, etc. in order to arrest their decline. New companies developing new technologies are continually undermining the foundations of the old companies, and will continue to do so, until private enterprise is outlawed.

Re:I think this calls for a googlegasm

[dustman]

Something to think about here is Wal-Mart.

Wal-Mart started out as a single store with a dirt floor (!). It was run extremely well by Walton, and he clawed his way to the top of an industry, beating out many established players.

While Walton was still around, Wal-Mart still seemed to have a heart. Now, it is hard to find a better example of the "soulless corporation" than Wal-Mart.

What's going to happen to Google when its "don't be evil" founders cash in their stock or retire?

Re:I think this calls for a googlegasm

[anaesthetica]

That's exactly right. Google is growing right now, and it's buying other companies so that it can amplify its fundamental innovation (search) using the small companies' innovative products (picasa, keyhole, etc).

It's not trying to buy startup competitors, which is what large declining un-innovative companies do when they're on the defensive. When google starts buying other competing search companies, we'll know they've jumped-the-shark.

You're absolutely right that in 10 to 20 years we'll be talking about the new company that can make Google irrelevant. Many people on Slashdot talk about Google being the Microsoft killer. At first, it sounds odd: how can an OS/Office Software company be killed by a web search company? But when you realize that Google's innovation has started a trend which could make rich client software companies less and less relevant, you begin to realize that direct competition is not what kills corporations, but asymmetric competition that makes them irrelevant. I give 100:1 odds that the Google-killer will not not be a search company.

Re:I think this calls for a googlegasm

[maxpup979]

This is an excellent example of what happens when the founders of corporations die off--generally leaving their empire to their kids. I have worked for 2 large companies, that were fantastic, wonderful places to work. Until the founders kids took over, and turned them into horrible employers. power with no sense of accomplishment, or responsibility is a bad thing...

Re:I think this calls for a googlegasm

[anaesthetica]

I agree with this: unearned power, priveledge, and position are quite clearly antithetical to the spirit of free enterprise. This is one reason why I am staunchly against the Republican repeal of the inheritance tax. Stupid, stupid idea.

Re:I think this calls for a googlegasm

[anaesthetica]

Someone will start a new corporation that will make it irrelevant. If we were discussing this back in the 40's or 50's, we'd all be railing against this Sears & Roebuck monopoly on mail-order catalog and department store industry. Today, Walmart has innovated to the point where Sears had to merge with KMart in order to survive. The same thing will happen to Walmart in a decade or two, and the same thing will happen to Google not long after.

Re:I think this calls for a googlegasm

[anaesthetica]

Google didn't just start out with scads of money and thousands of employees. They started out with two students, an algorithm, a couple servers, and a free webservice. That *is* a small company.

They've since grown into a mammoth company with huge server farms, thousands of employees, and the biggest valuation of any media company. That's my point: they went from extremely small nobodies, to bigger than the giant blue-chip corporate conglomerate, and they did so very quickly.

Re:I think this calls for a googlegasm

[TheSync]

1) 100 years ago: little indoor plumbing, widespread legal racial and religious discrimination

2) There was plenty of corporate lobbying and donations to government officials 100 years ago. The 1906 Pure Food and Drug Act was mainly the work of food producer Henry Heinz, for example.

1902 to 1912, often referred to as the muckraking decade, saw the publication of more than a thousand articles providing detailed accounts of the economic and political corruption caused by big business, especially the trusts.

3) Standard Oil never came close to cornering the market, by the time the antitrust case against it was filed in 1906, it had hundreds of competitors. Standard Oil oversaw a dramatic reduction in oil prices. It was convicted because of a general anti-business animus stoked by socialist intellectuals and journalists such as Henry Demarest Lloyd and Ida Tarbell and urged on by the company's higher-cost and higher-priced rivals. As a result the most efficient industrial organization of the time was crippled, weakening competition and pushing prices up.

AT&T was broken up into pseudo-monopoly ILECs, wow, thanks.

I can run Linux or OSX, don't need Microsoft. Who cares?

4) Western Union vs. Bell Telephone on telephone patents? 1878 Patent disputes between big corporations are old news. Of course, copyright extension is another matter.

Nothing is really all that new over the last 100 years...now go back 200 years, before the widespread legalization of joint-stock corporations...

Re:I think this calls for a googlegasm

[shmlco]

And I'm not. I'd say that for every person who inherits undue control of enormous assets, there are a thousand who inherit their dad's store, their mom's house, or the family farm or business.

Personally, this simply levels the playing field so that the average family isn't penalized when someone dies. It has little effect on larger estates, as the wealthy could already play the hide-the-money lawyer game with trusts, funds, and so on...

Re:I think this calls for a googlegasm

[bionicreagan]

Microsoft was never proven to be a monopoly, at least not by any objective standard. A monopoly by definition is an entity that is protected from competitors by the government. Microsoft enjoys no protection from the government and instead recieves regular crackdowns by our and other governments worldwide. The recent EU mandate that MS offer a version of Windows sans their own media player is repulsive. Who is the EU or any government body to set the terms by which a company provides its offerings to uncoerced customers? A court-ordered breakup of Microsoft would've been a complete inversion of the concept of justice and would hopefully be seen as the posterchild of the government's witchhunt against successful businesses everywhere.

Re:I think this calls for a googlegasm

[Alex P Keaton in da]

Actually, if you look up the History of A&P it is almost identical to Wal Mart, except 100 years earlier- the expansion etc. I can't find it but there was a great comparison in I think Forbes a year or so ago.
One thing RE: Wal Mart- Wal Mart is hated, yet the people who work there make more than the the person who works where you buy your gasoline, and has a better chance of health ins. What shocks people, is Wal Mart employees make almost double what the people in mall stores make, yet no one is going after the gas stations or mall stores. There has been a lot of attention paid to the Wal Mart out here in Amish country (NE OHIO), with hitching posts in the lots. I hate to tell you but, many Wal Marts have hitching posts. Out here you see a lot of Horses and buggies, and at least half the time the Amish are on cell phones- hate to ruin the myth. Wal Mart got big doing what no one else would- opening stores in small towns where the big boys wouldn't tread. And guess what- it wasn't the prices we loved (they are great) it is the hours- the mom and pop stores that charge $3 for a roll of Bounty Paper Towels, well they were open till 5 on weekdays and maybe 3 hours on Saturday. Thats why we country Bumpkins (I am one) love Wal Mart- it is more the hours than the prices...
If I may mention something regarding the death tax- A: the money is taxed as it is earned, so if it is saved, it is taxed again when the person dies. B: You would be shocked to find out what our farms are worth- As urban sprawl attacks us, our farms are worth millions to deveopers, and are taxed as such at death.

How much further until they surpass Microsoft?

[CyricZ]

How much further until they surpass Microsoft?

Re:How much further until they surpass Microsoft?

[toopc]

How much further until they surpass Microsoft?

Microsoft's market cap is about 275 billion, so Google still has a long, long way to go.

Re:How much further until they surpass Microsoft?

[tshak]

Microsoft's market cap is about 275 billion, so Google still has a long, long way to go.


Not to mention Google's P/E is almost 5x of MSFT's - this means that Google will most likely not be able to sustain this value, let alone gain anytime soon.

Is Google the New AOL?

[geomon]

How long until Google buys Time Warner?

Re:Is Google the New AOL?

[geomon]

They could buy VA Linux (or OSTG or whatever they call themselves this week) and fire CmdrTaco. (Do no Evil).

Heh... Let's hope they do it.

Google is great!

[rice_burners_suck]

I am glad that a company that "does no evil" is better off than a company that does nothing but evil. That only goes to demonstrate the power of good.

Google is truly a remarkable company. Innovation at its best... There's probably not a day in my life that I don't use Google at least ten times. I don't know where I'd be without it. One day, I aspire to work for Google myself... Keep up the good work, guys.

Re:Google is great!

[ari_j]

Evil will always triumph over good, because good is dumb.

Re:Google is great!

[NekkidBob]

Nananananananana google!
Nananananananana google!
google! google! BATMAN! I mean...GOOGLE!

Re:Google is great!

[Darkman, Walkin Dude]

First of all, Google's stock is overvalued. Second of all, their ubiquitous control of the search engine market is not a good thing. Why?

Okay, here's how it goes, the majority of searches on the internet are done via google, therefore there is a massive incentive to comply with whatever google comes up with next, for anyone that ever wants their site to be seen. This is called leveraging a strong market position, and could border on a monopoly style abuse.

And just like MS, there will never be any public outcry, because the viewing public neither knows nor cares. All any web designer can do is dance to whatever tune google plays, just like they still have to dance to the tunes that IE plays. Mmmkay?

Also the quality of their search results seems to be reduced lately. Whether thats because of the massive effort by webmasters to "game the system" or because they are losing focus on their core strength remains to be seen. I dunno, Google is like a clown, many coloured and jolly, but it still gives me the creeps.

Re:Google is great!

[prgrmr]

Will Turner: You cheated.
Jack Sparrow: [shrugs] Pirate.

Re:Google is great!

[leonbev]

Who bothers to go to Google's web site nowadays? I just use the Google toolbar built into Firefox.

Re:Google is great!

[prgrmr]

I noticed you were modded 'Funny' for your comment. Funny? I think not. It's this sort of justification that lets beliefs like this survive.

And it's comments like yours that demonstrate that the sarcasm gene is not evenly distributed.

Re:Google is great!

[goldspider]

Thinking in absolutes like "good" and "evil" indicates an unwillingness to consider every aspect of the subject being considered. Claiming that Google is incapable of wrongdoing or that Time Warner does nothing but evil only identifies you as a mindless zealot. I doubt you are capable of seeing anything but good in Google, no matter what they might do.

Re:Google is great!

[NoMoreNicksLeft]

Poser. I have all the original google day-to-day logo art tattooed on me, up to Halloween of 2004. I then ran out of room, so I had to start tattooing the rest onto my 4 month old son. It would have been nice to let him grow up to see his own unaltered adult face, but my plan to increase square inchage of my tattooable skin by becoming incredibly obese isn't progressing nearly fast enough!

Re:Google is great!

[Ioldanach]

I noticed you were modded 'Funny' for your comment. Funny? I think not. It's this sort of justification that lets beliefs like this survive.

Or you might just not know popular culture. Its a quote from Dark Helmet in Spaceballs: The Movie. Who, incidentally, loses.

Re:Google is great!

[Andrewkov]

I dunno, Google is like a clown, many coloured and jolly, but it still gives me the creeps.

I think I just found my new sig...

Re:Google is great!

[Ninwa]

Jack Sparrow: [after Will draws his sword] Put it away, son. It's not worth you getting beat again.
Will Turner: You didn't beat me. You ignored the rules of engagement. In a fair fight, I'd kill you.
Jack Sparrow: That's not much incentive for me to fight fair, then, is it?

I love that movie. :]

Nothing better..

[GarryOwen]

Nothing better than sane stock evaluations.

Re:Nothing better..

[sho222]

How did you get modded +5, Insightful for that comment? I assume you were being sarcastic... if you were being genuine, I might mod you the same.

Google's stock value is completely sane right now, in fact, it's probably undervalued. Look at the forward price to earnings ratio. It's at ~43 right now. Now take a similar company (Yahoo is probably the best one that you can compare with Google). Yahoo's forward price to earnings ratio is about 50. Google is growing (in terms of revenue) much more quickly than Yahoo (and just about every other company out there). They probably deserve a much higher multiple than 50, but at least give them that. This stock should be in the mid 300's to low 400's. If you believe Jim Cramer (and many people do), he's predicting $470 = (multiple of 50 X $9.40 earnings per share).

I was hoping for a diff headline...

[Anonymous Coward]

Internet search phenomenon Google has overtaken a swathe of venerable rivals to become the world's biggest media company by stock market value.

Top Spot?

[0kComputer]

I wasn't aware that 80bn in market capitol was the "Top Spot".

Another misleading headline...

Comment removed

[account_deleted]

Comment removed based on user account deletion

Allow me to rephrase

[Nom du Keyboard]

...so is now worth more than Time Warner

Allow me to rephrase: Some people think it's worth more than Time Warner.

Re:Allow me to rephrase

[Democratus]

"Some people think it's worth more than Time Warner."

Isn't that the very definition of worth?

Value only exists as an expression of people's faith.

Re:Allow me to rephrase

[Elwood P Dowd]

"Some people think it's worth more than Time Warner."

Isn't that the very definition of worth?

Value only exists as an expression of people's faith.

Time Warner is only as valuable as the proletariat families it can feed, capitalist pig-dog!

Re:Allow me to rephrase

[going_the_2Rpi_way]

And despite the objections to your post, you've hit the nail on the head.

Sure, the GOOG EPS of 2.53 is higher than the current TWX EPS of 0.72, but the P/E of GOOG is at a whopping 115 while TWX is at a much more classical 24.

A P/E this high is usually a strong sign of widespread enthusiasm for a company. You should exit under these conditions, not get in. To gain a profitable exit if you enter now, GOOG needs to either needs to hit an even higher P/E valuation or continue to maintain it's current unusually high valuation and substantially increase it's EPS.

If the GOOG valuation drops to more classical levels like, say, 30, then the EPS will neeed to be approximately 4 times higher than current just to maintain the ticker price.

For an investor, $1000 of TWX is much likely going to be worth more in the long haul than the same amount of GOOG.

Re:Allow me to rephrase

[HermanAB]

Yup, some 2300 years ago, Democritus said: A thing is worth whatever someone is prepared to pay for it.

Except that he said in Greek of course...

Economists have been struggling with that concept ever since, but the simplest trader in a bazaar (ancient name for stock market) understands it perfectly.

More than TW??!!

[Mad-Mage1]

I mean come on, this is so completely unrealistic that ity smacks of the old days of the Internet Bubble. TW at least has real assets that can be valued, while Google is primarily a IP (intellectual property) company. Yes they do make search devices, yes they do have a Proven (albeit short) track record of innovation, but valuing this company at that figure is totally over-reaching. Their P/E ratio is so over-blown that no serious investor can look at this as anything other than a over-correction based upon the fact that Google is an Internet darling and one of the few that surivived the purge and actually PROFITED.

Re:More than TW??!!

[MoonBuggy]

As another poster said, Google's got server farms and related infrastructure that aren't exactly worthless, but they are obviously barely a drop in the $80bn bucket. Having said that though, Time Warner is also an IP company. Physical DVDs, film reels etc. aren't worth too much really - it's the IP that you put on them that people are paying for.

It's still overvalued, but not necessarily for the reasons you said.

Re:More than TW??!!

[lommer]

Um, actually as another posted pointed out - TW's physical assets are $45 billion, while Google's are worth $3 billion. So actually, those DVDs, projectors, recorders, archiving equipment, broadcasting equipment, and everything else that Time Warner has does add up.

Guess I'll be buying the stock at 282.64 then!

[Yo Grark]

No seriously. It's insane. I scoffed at it's opening bid of $116.00 and just proved why I don't play the stocks :/

How many other geeks actually invested and how much? Any life savingers?

Yo Grark

1999

[mushupork]

Woohoo! The bubble is back!

They should buy Netzero...

[Anonymous Coward]

...so they can maximize synergies right into the ground.

Google Should Buy GM or Ford

[Doug Dante]

Both have Market caps at about $18B. If Google were to make a strategic investment of $5-9B in either or both, they could run the internal IT as well as insert Google things in cars. Employee e-mail, calendar, document management, and search by Google, Google maps and yellow pages in the cars, etc.

NYSE?

[adenied]

It's worth pointing out that Google is traded on the NASDAQ, not the NYSE. A bit different.

If you own stock...

[divisionbyzero]

now might be a good time to sell it. I don't Google is worth that much, but I'm not a stockbroker so what do I know? When this thing pops its going to drop like a rock. It's better to make a profit now rather than be locked out when the selling frenzy starts.

Re:If you own stock...

[Flying Purple Wombat]

I don't Google is worth that much, but I'm not a stockbroker so what do I know?

You probably know more than a stockbroker. The broker wants you to buy or sell something, anything - he doesn't care what - so he can collect his commision.

Re:They can't buy Time Warner.

[nelsonal]

Sure they could, same as AOL did most mergers aren't made with cash (although that changes from year to year). They just have to get TWX shareholders to agree to half ownership of the combined entity (which is basically what AOL did in 2000).

Google is evil

[91degrees]

I was fortunate enough to visit google's main HQ. They gave mea tour of thei server room. Now, on any server, you expect to have a few daemons. Google seem to have taken this literally. They summoned thousands of daemons from hell, and chained them to keyboards to answer people's queries.

I was a little shocked by this, but I put my surprise aside. I've worked with a lot of tech companies. I can forgive them their idiosynchrasies. But then we went to their CEO's office. To even meet the CEO, you have to sacrifice a goat, and if you actually want a full length meeting, he demands nothing less that a virgin sacrifice. So I sacrificed someone who was there for a job interview. The COE was pleased with this sacrifice, and I got to see him. To my shock, I saw that the CEO was Satan himself!

So don't believe the Google "Do No Evil" lies.

Re:Google is evil

[kertong]

> he demands nothing less that a virgin sacrifice.

That's ok. Here at google, we have plenty of those running rampant.

Minamlist humour

[MarkusQ]

Google hit $80bn on the NYSE yesterday, so is now worth more than Time Warner

For some reason this reminded me of an old minimalist joke:

So the guy on his way down sees a woman on her way up, and figures it wouldn't hurt to ask. "Hey lady," he shouts as they pass, "do you know anything about parachutes?"

"No," she shouts back, "Do you know anything about gas ovens?"

--MarkusQ

Re:Minamlist humour

[Anonymous Coward]

Color me stupid, but I don't get it.

Re:Minamlist humour

[X_Bones]

no, it's "minimalist" humor. In that the amount of humor in the post is minimal...

I want what they are smoking.

[Shivetya]

The P/E is already 111. So they think it can bear getting even higher? This sounds like investment house pump and dump, stuff we saw at the end of the 90s with the Internet boom.

Google would be foolish NOT to buy out companies using stock. Companies would be foolish to accept that type of buyout though.

As someone else said, some people think it is worth that much. Once the honeymoon ends we might see realistic values which I suspect are a third of what it is now.

Re:I want what they are smoking.

[mo]

I heard this argument about ebay too, back when it's P/E was somewhere around 2000 (yes that's right, 2000). Take a look at ebay's stock graph and note that they never really went down. When everyone else was busting, ebay mostly stayed the same. And had you bought ebay at the height of the dotcom boom, and held it til today, you'd be quite happy.

Now, I'm not saying that google isn't overvalued right now, but if they can sustain their income growth, they still might just be a good buy. Considering I spend more time looking at google ads than just about any other media channel, it's a good bet that they can continue to grow.

Wrong

[Prien715]

TW at least has real assets that can be valued, while Google is primarily a IP (intellectual property) company.

Correct me if I'm wrong, but the vast majority of TW's worth is their film/music catalogue. Which is um...IP.

Google's major earnings come not from licensing IP, but from advertising revenue, making it not unlike a traditional media outlet (e.g. TV station) as far as revenue model goes.

I would agree with your earnings assement. Google has shown that they can grow fast while remaining profitable on a sustainable revenue model. Does anyone remember the companies during the .Com era actually making profits? Certain tech companies (IBM, MS, Apple) on the other hand, have managed to justify these high IPO values since their stock rises are now near-legendary on wall street.

Re:Wrong

[SoupIsGood Food]

Google's major earnings come not from licensing IP, but from advertising revenue, making it not unlike a traditional media outlet (e.g. TV station) as far as revenue model goes.

You tryin' to tell me Google's got better market penetration and distribution than Time Warner, one of the largest cable providers in the US? One of the largest periodical publishing houses in the world?

Nnnnnnah. Didn't think so, neither.

By way of comparison, Cosmo.com, the internet courier company, was profitable... before it had more venture capital than it could ever repay rammed down its throat. There were a lot of medium-sized dotcom business who were funded like multi-billion dollar ventures instead.

It's not Google's fault their stock is worth stupid money, and they've been very careful not to live beyond their means and to keep control of their company, but that won't prevent the shareholders from throwing a fit when the price comes back down to earth. It will probably clobber the just-now-recovering tech sector when it does, too.

SoupIsGood Food

on the NYSE?

[LoganEkz]

Just to clarify the incorrect information in the article posted, Google (GOOG) is traded on the NASDAQ market, not the NYSE.

Re:Since when is Google a Media Company?

[AtlanticGiraffe]

A company's worth has absolutely nothing to do with income. Its worth on an open market tells you how much _profit_ the market players expect from it in the future. If Big Corporation Ltd. spends 50 billion to make 42.45 billion while Small Corporation spends 1 billion to make 4 billion, which one is worth more? Even better: What if Small Corporation is expected to grow exponentially without much added cost?

I've used google...

[exp(pi*sqrt(163))]

...50 times a day for many years. I've clicked on an ad maybe a dozen times in my life. I don't think any of those led to a sale. I wonder how long it will be before the advertisers notice this.

ma nah ma nah

[djdavetrouble]

since this will be a pointless discussion, for your viewing pleasure:

manahmanah

Re:ma nah ma nah

[djdavetrouble]

(link directly to server instead of coral cache.)
no, I used the coral cache intentionally to be nice to the server that is not mine, and of unknown capacity.

For more about coral see their homepage.
http://www.coralcdn.org/

Currently by any definition of worth

[SuperKendall]

Allow me to rephrase: Some people think it's worth more than Time Warner.

Well the stock market thinks so.

And frankly, on many other levels I'd have to agree that I think Google is "worth" far more than Time Warner. In terms of my daily life Google is worth much more. In terms of respect I have for people owning and operating the companies Google is worth a lot more. In terms of value to humanity, no question that Google is worth more.

So I would say you could almost make the case that people do not just THINK it's worth more, but all measures it is in fact worth more - currently even monetarily.

Obligatory...

[Wampus Aurelius]

...I, for one, welcome our new Google overlords. They are certainly preferable to our old Yahoo and MSN overlords.

Re: use this year's P/E instead

[falser]

If you use last year's profit to gauge Google's P/E (113) it looks like an overvalued stock. But Google posted an HUGE 1st quarter profit with a target of about $6 per share this year. At the current price of $285, that makes Google's current P/E 47.5 which is less than both Yahoo and Ebay and they're not growing anywhere near as fast as Google. This is what is fueling the recent rally.

What is this, superlative day or something?

[FunWithHeadlines]

Two stories ago: "World's Biggest Hacker"

Last story: "World's Fastest Inkjet Printer"

This story: Google Takes Top Spot."

Next story: "World's Most Obvious Dupe."

Well if thats true then...

[JaF893]

...I'm going to party like it's 1999.

Re:Media?

[QMO]

Books are a communications medium
Newspapers too.
Television is another medium.
Radio is another.
Internet is another medium of communication.
Google is a company that is very concerned with the medium of the internet, and all of the sub-media that the internet uses (text, pictures, audio, video).
So, Google is a media company.

Get it?

Re:NYSE?

[Anonymous Coward]

I'm wondering why you have a +5 Informative.

The NASDAQ is an Index

the NYSE is an Exchange

Completely different things, GOOGLE is listed on the NASDAQ and traded on the NYSE.

Sattelite radio

[QMO]

I see two possibilities for sattelite radio:

1 - It slowly subsides back into the swamp where fad electronics emerge now and then.

2 - It becomes like cable TV. You know, that TV that doesn't have commercials because you pay a subscription instead.

Enough said...

[johansalk]

From TFA: "Google is now worth $80bn (£44bn). This takes it ahead of media leviathan Time Warner, which is valued at $78bn. The valuation comes in spite of the fact that Google's annual sales total just $3.2bn, a fraction of Time Warner's $42bn. "

Let's look at the numbers....

[SurfTheWorld]

Google's market capitalization has nothing to do with being "worth" more than AOL Time Warner. The fact that Google has issued more stock and has a higher stock price than AOL Time Warner only means that Google has more publicly held debt. That's all stock is: publicly held debt.

Like privately held debt, Google must pay interest on the stock they issued. Those are called dividends. Additionally, Google may have to buy back shares at some point. Stock != value. Stock == debt. Earnings == value. Plain and simple.

From an investment standpoint Google is a tulip bulb. Let's compare the financials of the two companies at a macroscopic level.

TWX: Price of $17.08 on $0.73 earnings per share, giving a PE of 23.41.

Google: Price of $282.30 on $2.50 earnings per share, giving a PE of 112.92.

Simply put, Google stock is 112.92 / 23.41 = 482% more expensive than AOL's stock.

If you had $100 to invest TODAY, and your investment horizon was 1 year, and you had to choose between AOL and Google, this is how it would work out:

AOL: $100 at $17.08 / share = 5.85 shares. 5.85 shares * $0.73 earnings per share = $4.27. This is a 4.27% rate of return.

Google: $100 at $282.30 / share = 0.35 shares. 0.35 shares * $2.50 earnings per share = $0.88. This is a 0.88% rate of return.

The only way that Google can "even the score" and become a comparable investment would be either for the earnings per share to rise. The price of $282.30 is not sustainable given Google's earnings, and if you think that Google's stock price will continue to reside north of $200 you're smoking crack.

I'll continue to pick on Google financially and point out that in the state of Maryland, you can open a savings account at Bank of America where the annual interest rate for an account with $2500 is 0.55%. This is better than 0.44% and is insured money.

I love Google and think they provide wonderful services on the web. But as a financial investment I'd rather place my testicles in a vice and ask someone to squeeze rather than purchase their stock.

-c

Re:Let's look at the numbers....

[flanman]

I think you've been misled, stock != debt

While there are share issuances that act like debt such as preferred shares that have a financial obligation from the company, not all shares have a cash value on them.

Preferred shares generally have a fixed time to live and are "bought" back by the company at a future date (paying off the principle) with a fixed debt servicing cost (usually a dividend).

While the common shares of a company may be evaluated with EPS or EBITDA or whatever, the shares could be reduced to 0 value (or infinite value) without a direct consequence to the issuer. (without the implied challenges/opportunities to raising additional capital)

That's why some stocks, like google's, trade at significant multipliers to their actual earnings (exactly what happened in dot bomb) based on the "expert's" view of where the company's earnings would be in the future.

This is a dangerous game as we all know.

Re:Let's look at the numbers....

[falser]

Your math isn't right. Google's projected earnings this year is between $6 and $7, not $2.50.

Re:Let's look at the numbers....

[falser]

The stock market doesn't work backwards, it works forwards. Let's put it this way - if you wait until Dec 31st to decide to buy Google because it's P/E in fact did turn out to be $7/share then guess what... the stock will already be trading well above $300, probably more like $350 because traders will then be anticipating what Google will earn in 2006. You will have missed the opportunity to profit. That's why you don't use historical numbers to predict where a stock will be worth in the future.

Re:Google is a fine company, but not worth $80B+

[egypt_jimbob]

selling off the assests of Daimler, Ford, and GM (dozens of huge factories, countless acres of land, ships, airplanes, etc.) would produce larger revenues than selling off those of Google (dozens of thousands of old PCs).

But those dozens of thousounds of old PCs happen to be running the best search engine in the history of the Internet.

Re:submitter screwed up the headline

[Golias]

Bah!

The only reason this is a "top spot" is because, unlike many of the top media and technology companies, they are traded on NYSE instead of NASDAQ.

If they were a NASDAQ company, would anybody think that "Google stock now worth slightly more than Time/Warner stock" counts as news?

Sorry kids, they are still a smaller company than the eeeeeeevil one over in Redmond that manufactures full-screen error messages.

Re:NYSE?

[geniusj]

Thank you. I was wondering the same thing. These people are thinking of Dow Jones, the other big index.

-JD-

The correct term?

[Baldrson]

If natural monopoly isn't the correct term, then what is the correct term for the situation where Microsoft's operating system is in demand not because of its high quality but because the information industry's infrastructure must use it as a standard means of communication?

This seems higly analogous to the situation where you have one electrical utility because to extend the reach of the grid requires interoperation with that utility's existing grid.

Please point me to an article that draws the distinction between these two and has the proper term for the Microsoft case.

Not really

[SuperKendall]

The same function is performed far better by the BBC. CNN is really not providing as much added value as it would seem.

Re:NYSE?

[Thu25245]

NASDAQ is both. It's a "virtual" electronic exchange...no trading floor, no men in suits running around, but plenty of shares changing hands.

It's also an index of prices of the companies listed on it.

Re: use this year's P/E instead

[gjt]

The growth is coming from several directions. First, the number of searches done with the core search product is ever increasing as the Internet grows around the world. Secondly, they keep on finding new products to throw in front of users like GMail and Google Maps. If someone starts using Google for multiple services, that's a lot of adds that they can show an individual person. And e-mail is something that many users check several times a day - hence several more opportunities for Google to show ads to someone.

The stock price is very high. But if they keep on making money hand over fist, they might actually be worth the price. It's a very different situation from the 1990's when companies that were losing money had multi-billion dollar market capitalizations.

It's not debt, it's ownership

[WillAffleckUW]

Like privately held debt, Google must pay interest on the stock they issued. Those are called dividends. Additionally, Google may have to buy back shares at some point. Stock != value. Stock == debt. Earnings == value. Plain and simple.

Actually, a BOND is a debt. A Stock is a share in both the assets - and DEBTS - and potential earnings and losses, capped at a maximum loss of the total value invested (translation - you can only lose what you paid, no more).

A Stock has (optional) Dividends, which may or may not coorelate with earnings, but are usually a fraction as some money is saved in Cash (Google has lots), stolen .. um ... paid (whatever) to executives in options to dilute other owners or pensions to dilute future earnings or salaries to just make you angry or loans (rarely repaid) to make you hopping mad, and the stock price is an estimatation by the totality of the market as to what the company will be worth in current and future earnings and returns on investment. In general a stock price is close to, but not the same as, a bet on the worth of a company in six to twelve months from now, but in some cases - such as Google - this estimate is a lot of hooey or fluff.

As an example, take my holdings in EBAY - which is highly speculative, so I've only got $4000 in that - it's based on a projected growth rate of DOUBLE what GE will make in the same 2-5 year growth pattern. Who knows if it's true? Noone.

Now, if you'd like to talk Bonds (DEBT), or Options (Risky Bets on the Future Price of a Stock), or Preferred Stocks, we could do so.

Regardless, Google is not worth more than the EU, no matter how you slice it. No matter what price fools ... um ... investors are willing to pay for it TODAY.

Re:NYSE?

[kavau]

I'm wondering why you have a +3 Informative.

NASDAQ: A computerized trading system established by the NASD for over-the-counter stocks.

You are probably thinking about the Nasdaq Composite Index, COMPX.

Re:submitter screwed up the headline

[casefive]

Google is traded on the NASDAQ, symbol GOOG (four letter ticker symbol == not NYSE).

...and also, market cap == market cap. If a company traded on the NASDAQ is worth more dollars than a company traded on the NYSE, well, that's more dollars. More is more. Actual price of the stock is sorta secondary here, people aren't saying that the price of a single share of GOOG is now more than a single share of Time/Warner, though that is also true: TWX is going for ~$17, while GOOG did their IPO at $85 and are now flirting with $300!