lets be frank here: google hasn't done anything innovative in 5 years. incremental improvement. tweak here and they, yes. but innovative? the biggest "innovation" was adsense, and that wasn't even theirs.
"Microsoft will wait to see..."
clearly microsoft isn't waiting any longer. they're poised to do a netscape on google, which is what they should do of course... put a search bar on the desktop, up at the top of internet explorer, and voila. netscape redux.
"How large will Google have to become before slowing their innovation and playing it safe."
there isn't a whole lot on the 'innovative' side at google that is going to keep them growing. look at google labs: c'mon, there's nothing killer there.
google is not profitable simply as a search engine: their business model is one of an ad broker. if they extend that, serving context sensitive ads into other content, then they'll grow and eat into yahoo's business - which is one of being a content aggregator.
anyway, that's my two cents: microsoft should be able to eat up part of google's search revenue. google should eat into yahoo's business by building on its business as ad broker.
"There are enough brains coming out of MIT/Stanford to keep Google busy. Besides, there is an amount of prestige (honest/do-good-for-mankind company?) associated with working for google which does NOT exist with ANY corporate entity out there. Hell Google even makes GreenPeace look bad."
mit!? mit!?! gak!
but that point aside: the problem is the valuation of the stock. currently the stock is priced so high that options you'd get now are just not gonna be worth a whole lot in the next few years, unless the 2000 bubble returns. (and in some sense it has, to large internet stocks.)
so, will these brains from stanford and berkeley follow the money? or go work for greenpeace. um, i mean google?
"It opens up some fantastic marketing opportunities as well. Already they exploit this with the excellent GoogleAds along the side of the screen that have relevance to the e-mail one is perusing..."
terrific? jeez. terrific only when adblocker can finally find them.
interesting. so if i search fellatio on a9.com i get a sponsored link (ebay) that i don't get from google. does this mean that a9 has its own set of sponsors?
if you think this was negative, you should have seen some of my other comments yesterday... but...
1. as far as i can see, i was the first to reply directly to your message.
2. your message says "i think this equates to fraud...". you're much tougher here than i.
now for a constructive criticism: why don't you apply your analysis to the ability of a company to do a secondary offering or to create options out of thin air and distribute them to employees and analyze the scent of fraud there. these forms of dilution will generally affect the actual value of shares, and owners don't generally have the time to learn about it beforehand and reject or get out of their positions without a loss (unless its a secondary and the underwriter props up the share price, which i've seen often).
the employee options is more insidious to stockholders, although the many folks on this board who are recipients of such options will of course speak out of self-interest...
In 20 years, I'd love to see the stock price in the thousands.
if it goes public with a market cap of $33B, then for a stock price in the thousands in 20 years, you're expecting it to become the size of microsoft. in fact, at about $1000/share, you'd have something the size that microsoft is right now.
i don't see the risk/reward here as favorable to the investor...
ebay and rimm have traded in this range, and it has hardly deterred the day traders.
in fact, day traders need to maintain a $25K balance, and can leverage $100k off that. if you're a successful day trader, you'll have significantly more available to you.
the total number of shares ultimately for sale is fixed. that is, you know how many shares of the company will come to market in the future because you know how many shares and options were issued. (well, additional options in the future will certianly dilute, but that's a different issue.)
so really, the total number of shares that come to market is known. they're not increasing or decreasing the value of the shares by selling more or fewer. however, they might be able to manage the price by offering more or fewer. and this they can do initially by controlling the size of the initial float, and by lockup restrictions on the remaining shares.
however, once the lockups are over, its an open market: you know exactly how many shares will be eligible for trading. those who manage the ipo will hope to have a liquid market in those shares available by that time. or else.... plop...
in the long term, a stock should be priced according to its earnings. for example. say you're buying an apartment building. hyou're going to rent out the apartments. how much is it worth to you? well, you figure out how much you expect to earn from rentals over the next X years, figure out how many years' worth of rentals you're willing to wrap up into the price (maybe 10 or 15) and then pay that much.
p/e ratios sort of represent such a quantity. if a stock is trading at 180 p/e, like google, then it will take 180 years of earnings for the company to earn enough to cover your investment. or roughly, you're paying for 180 years of earnings.
now of course, it gets more complicated if the company's earnings are growing. in that case, you have to factor that growth into the price too, since we're predicting the future here.
and in google's case, that's what you're betting on.
right now, volumes are down in this market, and yet program trading is rising - 53% last week. unless someone is motivated to buy and prop up the price, this could fall like a rock.
although, the low float would give me pause before shorting. (i'm short yhoo now though....)
would be trading at such enormous valuations if not for the hedge fund and instituational speculators. how many years of high growth are priced in at a p/e over 100?
an ipo is a managed process. this is an experiment. the googlers wouldn't turn over design of their filesystem to morgan stanley. why should morgan stanley turn over design of the ipo process to techie weenies?
i mean, i'm supposed to pay to become part owner of a company, and my voice won't ever be heard? what happened to "no evil"?
sure, maybe you don't want to respond to the vagaries of the street. well, then don't pay attention to the stock price, sergey. but please, these shareholders are going to be the OWNERS of the company. if you don't want to share, then keep it private.
Having a stock double or triple on IPO day is a sign that the IPO price setters blew it... they could have charged double or triple in the first place and found people who would have paid it.
driving prices higher does not, in itself, show that there's demand. its a mechanism to create demand as well - namely from speculators who want to see prices go even higher.
you guys have not learned anything from the bubble. do not EVER think you're INVESTING when you're buying a stock with enormous valuation. never. ever. ever.
YHOO is no guide here: it could drop to 30% of its current price and STILL be wildly overvalued.
here's an exercise for you: take your favorite mid-sized company and look at the size of the float. and then look at the daily volume. then calculate from that what the average holding time for a share of the stock is.
roughly, its coming from a comparison to yahoo. which, by the way, is pretty overvalued here. (they've certainly been pumping it up over the last couple weeks).
in spite of all the talk about their being forced by circumstances to do the ipo now, it *could* be that we're in a period right now (say until 2005) where they're generating peak revenues. competition from yahoo, and what one would expect to be cutthroat competition from microsoft can seriously hurt here. anyway, we'll see.
but i'd also suspect that everyone's thoughts on how it will skyrocket out of the gate and then come back to earth might also be wrong: much of that behavior in 2000 was due to laddering, which is now illegal. there isn't a whole lot that folks are going to know about google a week after the ipo that they don't already know they day before the ipo. the only difference will be how it trades; and to drive it up high, you're going to need some big speculators to come in.
how much they earn from the ipo is determined by how many shares of its own the company itself is going to sell, times the selling price of course. that's the $2.7B. the $20B is the estimated market cap after going public, which is total number of shares outstanding times current selling price.
i haven't seen such a load of knee-jerk apologists since talk radio came out to defend bush against the claims of clarke's book....
look guys: if google were just reporting on its picture of the web, as perceived objectively by some algorithm or other, then maybe you'd all have a point. but they're actively seeking to make money by selling keywords and by placing ads on specific keyword searches. they need to act responsibly. they have recognized this in the past.
what amazes me most about this dialogue here though is: i get the impression folks here actually READ those dang ads. now that's the eye opener, cuz i'm sure i've never clicked on one, and my mind just avoids them.
by pumping cash into the stock markets worldwide and reinflating the bubble, they've not only brought back the undead companies of the bubble year, but started a new race on things like chinese internet companies, and now... the java toaster...
i dare these designers to name one reason why any of my kitchen appliances would need to communicate with each other. or why the heck my phone would make a better interface to any of these devices.
while it seems true that oursourcing and loss of jobs is here to stay for some period, there is at least one thing that's missing from the discussion over the near term/longer term: the us$ is under quite alot of pressure to devalue relative to other currencies. my favorite (bearish) economist, Stephen Roach (morgan stanley) sees at least another 22%. not that that solves the problem.
but face it guys: the world is - or should be - on track for greater equilibrium, which - in the u.s. - means a lower standard of living all around. get your big screen tv's now.
Slashdot Mirror
one word: short any rally.
maybe polaroid and moxie just suffered the fate of being nouns.
"Google will continue to innovate ..."
..."
... put a search bar on the desktop, up at the top of internet explorer, and voila. netscape redux.
... yawn.
lets be frank here: google hasn't done anything innovative in 5 years. incremental improvement. tweak here and they, yes. but innovative? the biggest "innovation" was adsense, and that wasn't even theirs.
"Microsoft will wait to see
clearly microsoft isn't waiting any longer. they're poised to do a netscape on google, which is what they should do of course
"How large will Google have to become before slowing their innovation and playing it safe."
there isn't a whole lot on the 'innovative' side at google that is going to keep them growing. look at google labs: c'mon, there's nothing killer there.
google is not profitable simply as a search engine: their business model is one of an ad broker. if they extend that, serving context sensitive ads into other content, then they'll grow and eat into yahoo's business - which is one of being a content aggregator.
anyway, that's my two cents: microsoft should be able to eat up part of google's search revenue. google should eat into yahoo's business by building on its business as ad broker.
gmail, location-based searching, sms
"There are enough brains coming out of MIT/Stanford to keep Google busy. Besides, there is an amount of prestige (honest/do-good-for-mankind company?) associated with working for google which does NOT exist with ANY corporate entity out there. Hell Google even makes GreenPeace look bad."
mit!? mit!?! gak!
but that point aside: the problem is the valuation of the stock. currently the stock is priced so high that options you'd get now are just not gonna be worth a whole lot in the next few years, unless the 2000 bubble returns. (and in some sense it has, to large internet stocks.)
so, will these brains from stanford and berkeley follow the money? or go work for greenpeace. um, i mean google?
wow. wasn't that the whole idea behind loudcloud? originally i mean. kind of a loser ...
"It opens up some fantastic marketing opportunities as well. Already they exploit this with the excellent GoogleAds along the side of the screen that have relevance to the e-mail one is perusing ..."
terrific? jeez. terrific only when adblocker can finally find them.
interesting. so if i search fellatio on a9.com i get a sponsored link (ebay) that i don't get from google. does this mean that a9 has its own set of sponsors?
if you think this was negative, you should have seen some of my other comments yesterday ... but ...
...". you're much tougher here than i.
...
1. as far as i can see, i was the first to reply directly to your message.
2. your message says "i think this equates to fraud
now for a constructive criticism: why don't you apply your analysis to the ability of a company to do a secondary offering or to create options out of thin air and distribute them to employees and analyze the scent of fraud there. these forms of dilution will generally affect the actual value of shares, and owners don't generally have the time to learn about it beforehand and reject or get out of their positions without a loss (unless its a secondary and the underwriter props up the share price, which i've seen often).
the employee options is more insidious to stockholders, although the many folks on this board who are recipients of such options will of course speak out of self-interest
In 20 years, I'd love to see the stock price in the thousands.
...
if it goes public with a market cap of $33B, then for a stock price in the thousands in 20 years, you're expecting it to become the size of microsoft. in fact, at about $1000/share, you'd have something the size that microsoft is right now.
i don't see the risk/reward here as favorable to the investor
ebay and rimm have traded in this range, and it has hardly deterred the day traders.
in fact, day traders need to maintain a $25K balance, and can leverage $100k off that. if you're a successful day trader, you'll have significantly more available to you.
the total number of shares ultimately for sale is fixed. that is, you know how many shares of the company will come to market in the future because you know how many shares and options were issued. (well, additional options in the future will certianly dilute, but that's a different issue.)
.... plop ...
so really, the total number of shares that come to market is known. they're not increasing or decreasing the value of the shares by selling more or fewer. however, they might be able to manage the price by offering more or fewer. and this they can do initially by controlling the size of the initial float, and by lockup restrictions on the remaining shares.
however, once the lockups are over, its an open market: you know exactly how many shares will be eligible for trading. those who manage the ipo will hope to have a liquid market in those shares available by that time. or else
in the long term, a stock should be priced according to its earnings. for example. say you're buying an apartment building. hyou're going to rent out the apartments. how much is it worth to you? well, you figure out how much you expect to earn from rentals over the next X years, figure out how many years' worth of rentals you're willing to wrap up into the price (maybe 10 or 15) and then pay that much.
p/e ratios sort of represent such a quantity. if a stock is trading at 180 p/e, like google, then it will take 180 years of earnings for the company to earn enough to cover your investment. or roughly, you're paying for 180 years of earnings.
now of course, it gets more complicated if the company's earnings are growing. in that case, you have to factor that growth into the price too, since we're predicting the future here.
and in google's case, that's what you're betting on.
right now, volumes are down in this market, and yet program trading is rising - 53% last week. unless someone is motivated to buy and prop up the price, this could fall like a rock.
....)
although, the low float would give me pause before shorting. (i'm short yhoo now though
would be trading at such enormous valuations if not for the hedge fund and instituational speculators. how many years of high growth are priced in at a p/e over 100?
an ipo is a managed process. this is an experiment. the googlers wouldn't turn over design of their filesystem to morgan stanley. why should morgan stanley turn over design of the ipo process to techie weenies?
i mean, i'm supposed to pay to become part owner of a company, and my voice won't ever be heard? what happened to "no evil"?
sure, maybe you don't want to respond to the vagaries of the street. well, then don't pay attention to the stock price, sergey. but please, these shareholders are going to be the OWNERS of the company. if you don't want to share, then keep it private.
who is buying for the long term? that's no bargain ... its hard to imagine that its even within a small fraction of fair value.
Having a stock double or triple on IPO day is a sign that the IPO price setters blew it... they could have charged double or triple in the first place and found people who would have paid it.
driving prices higher does not, in itself, show that there's demand. its a mechanism to create demand as well - namely from speculators who want to see prices go even higher.
you guys have not learned anything from the bubble. do not EVER think you're INVESTING when you're buying a stock with enormous valuation. never. ever. ever.
YHOO is no guide here: it could drop to 30% of its current price and STILL be wildly overvalued.
bah. traders and day-traders provide liquidity.
here's an exercise for you: take your favorite mid-sized company and look at the size of the float. and then look at the daily volume. then calculate from that what the average holding time for a share of the stock is.
anyway, you want the traders. believe me.
roughly, its coming from a comparison to yahoo. which, by the way, is pretty overvalued here. (they've certainly been pumping it up over the last couple weeks).
in spite of all the talk about their being forced by circumstances to do the ipo now, it *could* be that we're in a period right now (say until 2005) where they're generating peak revenues. competition from yahoo, and what one would expect to be cutthroat competition from microsoft can seriously hurt here. anyway, we'll see.
but i'd also suspect that everyone's thoughts on how it will skyrocket out of the gate and then come back to earth might also be wrong: much of that behavior in 2000 was due to laddering, which is now illegal. there isn't a whole lot that folks are going to know about google a week after the ipo that they don't already know they day before the ipo. the only difference will be how it trades; and to drive it up high, you're going to need some big speculators to come in.
how much they earn from the ipo is determined by how many shares of its own the company itself is going to sell, times the selling price of course. that's the $2.7B. the $20B is the estimated market cap after going public, which is total number of shares outstanding times current selling price.
i haven't seen such a load of knee-jerk apologists since talk radio came out to defend bush against the claims of clarke's book ....
look guys: if google were just reporting on its picture of the web, as perceived objectively by some algorithm or other, then maybe you'd all have a point. but they're actively seeking to make money by selling keywords and by placing ads on specific keyword searches. they need to act responsibly. they have recognized this in the past.
what amazes me most about this dialogue here though is: i get the impression folks here actually READ those dang ads. now that's the eye opener, cuz i'm sure i've never clicked on one, and my mind just avoids them.
by pumping cash into the stock markets worldwide and reinflating the bubble, they've not only brought back the undead companies of the bubble year, but started a new race on things like chinese internet companies, and now ... the java toaster ...
....
i dare these designers to name one reason why any of my kitchen appliances would need to communicate with each other. or why the heck my phone would make a better interface to any of these devices.
stooopidity is racing ahead again
while it seems true that oursourcing and loss of jobs is here to stay for some period, there is at least one thing that's missing from the discussion over the near term/longer term: the us$ is under quite alot of pressure to devalue relative to other currencies. my favorite (bearish) economist, Stephen Roach (morgan stanley) sees at least another 22%. not that that solves the problem.
but face it guys: the world is - or should be - on track for greater equilibrium, which - in the u.s. - means a lower standard of living all around. get your big screen tv's now.