Google Stock and More

This Web Site is not intended to persuade anyone to buy or sell Google Stock

That is my Opinion on Feb 15, 2006

The 52 high of Google Stock at $475.11 was absolute ridiculous and had no basis in Profits. There was dreamers buying stock who must have thought that Google was worth tons of money even though the Google Profits did not show that was true.

The Stock investors have bid Google Stock up to the point to where the Google Market Cap is over 2 times higher than the Yahoo Market Cap, and yet the key stats, revenues and profits are close to the same. That makes no sense at all. That is why the investors in stock have started to bid down the price of Google Stock and the Google Stock Needs to go a lot lower to get to the price it really belongs at.

Perhaps Google will in time earn the profits that justify the stock being where it is at now. However Google is going to have to come up with some creative methods of getting more Revenues and turn the revenues into Profits before the company's Stock could be justified to be trading at the price it is now trading.

Google has been good for internet commerce. And Google Competition to yahoo is good and makes Yahoo work harder. And maybe someday the Google Revenues will justify the overprice Market Cap that Google has presently. I hope Google continues to be innovative and is successful in getting the revenues and profits to justify it's present Market Cap, or Stock Price. But at the present time Google Stock is still over priced, tremendously over priced and Google Stock May continue to go down to the Price the Stock is really worth.

Google no doubt has very bold management. Google begin as a corporation by bucking the established way of making a public offering. Google's Bold Management Won and Google Prospered with it Stock Making great gains very quickly. Google recently showed it's boldness by bucking the US Government and not giving the government the stats it wanted. And the US Government did not like how Google handled the China Google Search Engine.   It takes bold people to buck the United States Government.

Will what made Google great, the bold management, create troubles for Google that in the end will be troubles that are not good for the Corporation? This could very well happen.

If I were a young software engineer I'd love to be working at Google for I know the Corporate Culture at Google must be incredible. I have worked for a Computer hardware company that had a very high growth rate as Google has at this time. I know the type of Corporate Culture that Google has in order to have the high growth rate and it is for certain a wonderful environment to work in. Thos who are on the Google Team are very lucky people.

I wish Google all the best for Google is and incredible company rendering a much needed service to the entire world. And I have to believe the bold and innovative management of Google has more innovations that will bring in more revenues and the company may someday be worth the Market Cap it presently enjoys. However at this time I see Google Stock as being worth half of what it is selling for on the market.

Robert Lee Johnson

That is my Opinion on Feb 15, 2006

Google Stats as of Feb 15, 2006

Google Key Stats

Yahoo Key Stats on Feb 15 2006

Take a Look at the Market Caps of the two Search Engine Companies

Google Market Cap : 

Yahoo Market Cap:

Google Stats definitely show the stock is selling for about twice what the stock is really worth

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Sunday, February 26, 2006

Google and Streaming Video

Google has been full of pleasant surprises since the Search Engine was put on line. The Pleasant Surprises continue with the "Free Streaming Video Server" that Google now offers to the General Public.

Google has provided a way for anyone and everyone to post their Video on the net to be viewed by the world. Google policy of providing a free Video Server will eventually change the course of many things in the world. The many ways that Google "Free Video Server" will change the world cannot be imagined by anyone at this time. However the impact of the Google’s "Free Video Server" is already beginning to take place. I predict the Google Move to offer a "Free Video Server" will very quickly escalate Video on the Internet, sell more Video Cameras, introduce Video to Business Web Sites to promote their businesses more effective and therefore realize greater sales and greater profits, and in the end will stimulate the economy to some degree.

Author of this Page, Robert Lee Johnson, Music Video on Google Com click here

When the Internet first appeared and for many years thereafter, the net might be likened to a Newspaper or Magazine with information and print type of advertising. When MP3 Files went on the net, the Internet moved from Print, Newspaper/Magazine Technology to Print Plus Radio, and this was a big and important move. With Google offering it’s "Free Streaming Video Server" the Internet now advances to the Television stage, and advance for everyone who uses the net.

Many independent businessmen have used the Internet to promote their products world wide, and have done so with great success. The more advanced Hand Crafters of Musical Instruments now sell their products world wide and this makes them successful. Other type of small businesses on the Internet have world wide Customers. As streaming video becomes the norm, is used by everyone, both large and small businesses can use Internet Streaming Video to promote sales, and it will not cost and arm and a leg for the cost will be affordable to any business who has the foresight to use the new "Streaming Video Technology."

I personally have music videos of many songs I have written and recorded. I wanted to put those Videos on the net but was reluctant to pay the price that a commercial "Streaming Video Hosting Service" would charge. When I discovered that anyone could upload any video, in any format, to Google, and the Video could be any resolution and any length, I immediately uploaded on of my Mandolin Songs in the form of a "Still Picture Video" that displays the Photographs I have taken with my Digital Camera, and the Abstract Digital Photographs I have created using a computer program. One day later my Video is not available for viewing on Google. The response to "Free Video Streaming" on Google has been so great that I believe it might be as long as a week before my Videos will be available for viewing on www.video.google.com By the way the name of my First Streaming Video uploaded to Google Video is, "Bluegrass Mandolin Rock--abstract."

Author of this Page, Robert Lee Johnson, Music Video on Google Com click here

I used the Microsoft "Movie Maker" using my recorded sound file of "Bluegrass Mandolin Rock" and then put in the video portion the Abstract Pictures I have created using a Computer program. I was most certainly happy to find a Free "Streaming Video Server" that Google is offering to the general public.

I have considered Google Stock as being overpriced because of the profit the company has generated. Google Profit from Word Go has always been very good, but I just didn’t think it was good enough to justify the price that Google Stock sold at when the stock was at it’s peak. I now have to wonder if perhaps the Peak Price of Google Stock was maybe justified for it is very evident that Google is continually offering new services, such as the free "Streaming Video Server" that will be creating more business for the very advanced and progressive high tech company.

By Robert Lee Johnson

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Author of this Page, Robert Lee Johnson, Music Video on Google Com click here

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Google Stock and The Future

Saturday, July 23, 2005

This web site is not intended to persuade you to buy Google Stock, or to not buy Google Stock. This web site is informational and presents data that perhaps might help you decide either way to buy or not to buy, to hold or to sell your Google Stock. The decision of course is your own for everyone must take the responsibility for their own investment decisions.

Google Stock went from a Public Offering Price of $85.00 to a high of $317.80 in slightly less than one year. This of course is a phenomenal gain for any stock to make in one year's time.

Stocks usually rise in value because investors see the stock as having a potential for very high earnings as time goes by and everyone wants to get the stock early so they can be in on the great gains they believe the stock will make as the earnings of the Corporation goes up. Apparently those who have driven the price of Google Stock so high in it's first year see the company as having a potential to achieve very high earnings. And let's face it there are buyers who just jump on the band wagon and buy simply because a stock is going up at a phenomenal rate.

A stock that is going up in price at a fast pace seems to develop a momentum.   This happened with many internet stocks before the big bust came on the Dot Com Stocks. If a stock or a group of stocks has great momentum, going up, that seems to motivate people to keep bidding the stock up and the company, or group of companies do not perform, the stocks are at some time going to quit going up and they will go down to their real value.

Before one buys a stock simply because it is going up at a fast pace, they need to ask themselves "Is this Stock really worth the money that I will pay."  That is a question that is not easy to answer. It takes much research to know if a stock that is going up at a super fast pace will deliver the goods, will show enough profit to warrant the price that is being paid for the stock as it climbs in price and sometimes even the so called experts are wrong.

When the internet stocks were going up because they were going up, even some of the Mutual Funds got caught up in the momentum to buy and when the internet stocks went bust, the stockholders in the Mutual Funds lost their money. Now Mutual Funds are supposed to have experts who know the market. But the truth is that no one can know everything about the market and so even the so called experts sometimes get caught up in something that causes them to make the wrong decisions, as happened with the internet stocks "Boom and Bust." So caution is in order when considering a stock that is skyrocketing in price. Rational thinking needs to be engaged when considering a Stock that is going up so fast that it is near unbelievable.

One needs to realize there is a great risk involved in stocks that are climbing at a super fast pace. If one is willing to take the risk and know they may lose on the investment, then I suppose they have made their decision and they must live with either making some good gains or in losing on the investment, whichever way it might go in time. Of course if you play it safe and the stock is another "Microsoft" then you regret playing it safe.  However if you buy and the stock continues to climb for a certain amount of time and then the price starts going down big time and you lose money big time, then you are sorry you took the risk and lost. Needless to say It can always go either way. 

Google Stock went crazy beginning some time after march 3 2005 when I wrote my last update about the stock. I have to say that I never expected Google Stock to go up to over $300.00 so quickly. I do not think the stock warranted that kind of rise in price and I still do not think the stock warrants that kind of price on the market at this time. However the traders took the Stock up to what was to me a near unbelievable price.

What do the experts say about Google?

On July 22, 2005 Needham & Co downgraded Google Stock from a buy to a hold. Legg Mason also recommended a hold on July 22, 2005. There are some companies recommending Google as a buy. And one company is recommending Google as a strong buy.

As of this date I would not recommend a buy. I would recommend a hold. I’d say if you are a real gambler in the stock market and are seeking to lay some money on the table and see if your number comes up then Google is as good of gamble to buy at this time for one cannot know for sure what will happen to Google. Whether one should buy or not buy Google Stock depends on what kind of investor you personally are. For conservative investors I do not think Google is a good stock to buy but is instead a good stock to hold at this time. This is especially true if you purchased Google when the price was down at a more sensible price. If you are a gambling type of investor then Google is as good or maybe better than betting on a Roulette Wheel at Las Vegas.

If I would have had the money I would have purchased Google at the public offering. I would have held the stock I purchased for I knew the Stock would go up because Google is a Solid Company with a good and useful product and the company appears to have good management. I would have been overjoyed and somewhat surprised to see Google reach the $286.00 mark.

Some investors are just plain nuts, or maybe a better word is Gamblers. I think at this time only the Gamblers will drive the price of Google Stock immediately higher for the income and profits of the company do not warrant the price of the stock to go higher at this time. If the price of any stock is taken high by gamblers, it will eventually fall back to it’s real value. This has been proven time and again on individual stocks and on the value of the Stock Market as a whole.

The income or the earnings of Google is not close to being high enough to warrant the price of the stock. I say that as a conservative investor not as a gambler.

I realize the price of a stock is based on it’s income/earnings, and most of all by it’s potential for higher earnings. Quarterly earnings of Google are up by 477 percent which is of course incredibly good. Can Google Revenues Continue to grow at this pace? If Google income does continue to grow at this pace, how long can the growth continue? How much higher can the income and earnings of Google go? If Google Income should stop growing, what would happen to the price of Google Stock. I think it all boils down to growth fueling the rise in the price of Google Stock.

When Google's high growth rate stops and a slower growth rate is in place, I think the company had better have a good profit margin if the stock is to hold it's value.

Microsoft at this time has

Revenue (ttm): 38.92B

Net Income Avl to Common (ttm): 11.24B

Needless to say Microsoft has a very high profit margin and Microsoft Stock Holds it Value

At this time Google has:

Revenue (ttm): 3.79B

Net Income Avl to Common (ttm): 704.34M

Google has a very high profit margin also, not as good as Microsoft's Profit Margin, but none the less still quite good.

The Total Debt of Google is:

Total Debt (mrq): 1.31M

This should mean that Google is not operating on Borrowed Money and that of course is good news.

Google Cash Flow:

Google Cash on hand, or Cashflow is good, but of course it does not compare to the Cash Position of Microsoft. If Google Cash on hand was better it would more justify the rise in the Google's Stock Price. None the less Google Debt and Cash Flow Situation is good.   As long as the revenues remain high, Google is in good shape. If Google's Revenues for some reason should drop, they would not be in a super good condition. Of course that is true with most any Corporation.

Microsoft has Zero Debt

Total Debt (mrq): 0

Microsoft Cash Flow:

Everyone knows that Microsoft has deep pockets.

Can Google ever achieve the profit margin that Microsoft Enjoys? Good Question. I very much doubt if Google could ever achieve the profit margin that Microsoft Enjoys, of course no other company that I know of has the high profit margin that Microsoft has.

Google appears to be running an efficient operation for the company is showing a good profit margin in spite  of their high growth costs. And of course this is good news in business.

I have to believe that Google's Success will depend on the company maintaining it's growth rate for a long period of time. I personally believe this can be achieved.

How much can Google Grow? If and When Google levels off, how much will their revenues be at that time?  I'm sure there are a lot of people who wish they could answer that question.

In Checking what I consider a critical ratio, the Market Cap compared to the real profit available to common stock, I believe that Google is way over priced at this time.

Google

Dell Computer

Wal-Mart

Microsoft

The Real Flaw in Google Being as high in price as it is at this time is the P/E of 119.53, that is way to high. To me the Google Stock is overpriced since I'm a conservative investor. If Google had a P/E 40, I'd say it would be worth the risk, maybe. If the Google P/E was as low as Dell Computer's P/E of 32.41, I'd be more incline to purchase at the present price. But for me the P/E of 119.53 is just to high for me to invest at the present price.

Of course I realize that what really drives the Price of a stock is that the investors are betting the stock will go higher in price. And so investors see Google as a new technology, a high technology, an internet technology, and they believe that somewhere down the road someone else is going to pay more money than the present price the stock is selling at.  In a nutshell that is what drives the stock market.

There is a saying:

If one does not gamble they cannot win  -- And that is true.

But If one does not gamble they cannot lose either -- it goes both ways.

For any investment I make I want to minimize the risk. But that is a matter for each investor to decide.

If I had investment money to buy Google Stock at the Public Offering Price of $85.00 a share, I would have invested and never looked back. But to me the price of Google Stock has gone so high without the Justification for the price going high, other than the fact that maybe, just maybe, someone will pay more for the stock as time goes by.

There are of course no absolutes in the stock market. For certain it is not mathematics. Stock investors must use their best judgement, but of course judgement can be based  somewhat on mathematical figures that calculate the accounting figures to see if the stock is under priced or over priced. However, the uncertainty of the future enters the picture. That uncertainty is what makes buying any stock a risk. So one must use their best judgement to determine if the risk they are taking is worth what they think the reward might be in profits later on if the stock should continue to go higher.

Humans are born gamblers. They love to go to Las Vegas and play the tables with the hope of winning money big time. And people love the thrill of taking the risk involved in Gambling. It's just human nature.  The same is true to some degree for investing in the Stock Market. However one does have better odds when betting on a stock than they do when betting on a number at the Roulette Wheel in Las Vegas.

Realistically I have to say that if Google Management remains top notch, the potential for Google income and the earnings is super good, and what seems almost unlimited at this time. Of course there is always a limit. But I feel the limit will not be realized in the next 3 or 4 years and in fact it might take another 10 years before the limit is reached, if the limit is ever reached. I suppose this is one reason that Google Stock has soared to heights that I never expected to see so soon.

Google's success will depend on how much business the Google Advertising brings to the customers. As far as I can learn Google Advertising works. If I were selling or promoting on the net I would most certainly use Google Advertising. Google ads are showing up in the right places to do the advertisers good, and should be getting results. But I have no hard fast stats on the results that Google Ads are getting for their customers.

Using data gained by tens of thousands of hours of web surfing and having been in the advertising business myself as a writer and salesman of Radio Advertising, I can tell you that targeting the right audience is everything in advertising. Google ads tend to do this quite well from what I have seen on the net.

Google’s success will be determined if their advertising gets results for their customers. It is as simple as that. Google ads appear to be getting success for the company’s customers.

The internet is just now taking off to get where everyone thought it was at 6 or 7 years ago. Broadband is becoming available to everyone. Broadband increases traffic on the net to a point to having a web site can be a viable method of sales and promotion.

Using intuition I’d say that Google has close to an unlimited potential for success. Google management seems to know how to do it.

If anyone bought Google stock at the public offering and still has it they could sell and make a tremendous gain in a very short period of time. And I’m sure there are Google Stock Holders who have done just that.

I’m not a gambler by nature when it comes to stocks. However, if I had Google Stock that was worth $1,000,000.00 I would hang on to it. If things go like it appears they might go, that stock might be worth $50,000,000.00 at some time many years from now. If I had $1,000,000.00 worth of Google Stock I would have paid $284,391.53 for the stock at the public offering of $85.00 a share, I believe that was the offering price. My gains at this time would be over 350 percent.

Though Google Stock appears to have near unlimited potential, the future is never completely predictable for all variables that determine the future cannot be known at any given time. Our economic system and the world in general is full of surprises. This means that any given stock, including Google, could drop in price due to unforeseen circumstances. Anyone who invests in stocks should realize they are risking. This is a fact of life that no one can change.

Good Stocks traditionally soar after the public offering. Google Stock most assuredly soared. If I am correct in believing that the Google Company has a near unlimited potential, then the stock will continue to go up in value.

If I were an investor with $1,000,000.00 to invest in Google at the current price of the stock would I do it? Good question and I’m not absolutely sure of the answer. It would be a hard decision.

I think perhaps the price of Google Stock may drop for that is the current trend after the stock reached a tremendous high of $317.80 a share. Perhaps some investors are selling and taking some very nice profits and this is driving down the price of Google and the price may go down even lower before it bottoms out from the current round of selling. If however, Google has a near unlimited potential for customers, then the stock will eventually start to go high again.

You see some Corporations that have done incredibly well and have had stock splits, many of them over a long period of time. If Google does have a near unlimited potential to sell advertising then over the years to come I would expect to see stock splits. In fact to me this seems like a pretty good time for a Google Stock Split. This would of course make the Google Stock look very good. But looking very good doesn’t get it, actually being very good is what gets it in the long run.

Google is fast approaching the revenues that their competitor Yahoo has. This when Yahoo has been in business for many years. I have to believe that in the next year Google will have revenues that will be greater than the revenues of Yahoo.

Yahoo is quite diversified. As far as I know Google services are more specific and Google is succeeding to a degree that perhaps no one thought possible.

After writing this paper I have come to the conclusion that Google will continue to grow. How fast will Google Grow? Will Google stock make really good gains over the next year? Only a gifted psychic could answer those questions for certain. However I still see Google as a solid company with a very useful product and the company is very well managed.

If I had Google Stock that I had purchased at the Google Public Offering I most assuredly would not sell it at this time.

I hope perhaps this discourse on Google may have given you some information that might be helpful to you in making decisions as whether to invest in Google Stock or to help you decide if you should hold or sell your Google Stock. In the end we must all make our own decisions using the data we have and our intuition. We must ultimately take the responsibility for the decisions we make.

3/5/2005

My original article on the Future of Google was written when Google Stock was being offered. My Predictions were that Google Stock would go up because Google is basically a solid company with a good product and good management. My Predictions have come true, Google Stock is up about $100.00 $186.00  a share from the price paid by those who were lucky enough to get the stock at the Public Offering. 

Will Google stock have great gains in the immediate future? Only a gifted psychic could answer that question, and the best psychics are considered great if they can be right 85% of the time. I'm not a psychic who earns his living making predictions on stocks. I have only facts and logical thinking to make my predictions. Using reason and facts I would have to say that I cannot believe that Google Stock is going to make the same high gains that it made for the last few months after the stock was offered to the public. However, I believe that Google Stock will make good long term gains for the services being sold are good and the company has the potential to offer more services that are so useful that I have to believe Google Revenues will continue to increase over a long period of time.

The Web Master

Robert Lee Johnson

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