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

[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

[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

[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...

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?

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!

[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.

Nothing better..

[GarryOwen]

Nothing better than sane stock evaluations.

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

[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.

1999

[mushupork]

Woohoo! The bubble is back!

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.

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.

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.

ma nah ma nah

[djdavetrouble]

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

manahmanah

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."

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.

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.