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Google Passes Exxon to Become Second-Most Valuable U.S. Company

bloomberg.com

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Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#11

Post by rayiner »

martythemaniak wrote: post #6

I know it sounds a little ridiculous, but I think Google still has a long way to grow. I can easily see them as the first trillion dollar company and well beyond that. I think they understand the process of re-inventing themselves better than any other tech company. They acquire a lot of companies, some of which continue to grow and change the very nature of Google itself (example Android). They also understand Black…

> I can easily see them as the first trillion dollar company and well beyond that.

At least Saudi Aramco, if not some of the other state-owned oil companies, are already over $1 trillion.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#12

Post by aray »

baddox wrote: post #8
JumpCrisscross wrote: post #5

Earlier quoted context omitted.

Google's value vis-à-vis Exxon reflects Google having a lightly regulated de facto monopoly on search in most internet connected countries, while Exxon is in a fragmented, heavily regulated industry. Technology becoming the driver of the world economy would involve it ( [1] http://www.econstats.com/wdi/wdiv_533.htm [2] https://www.cia.gov/library/publications/the-world-factbook/...

> while Exxon is in a fragmented, heavily regulated industry You seem to imply the assumption that the regulations in the energy industry don't benefit ExxonMobil.

If you have examples of that I'd be interested in hearing them. Otherwise the refutation is not really useful.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#13

Post by JumpCrisscross »

baddox wrote: post #8
JumpCrisscross wrote: post #5

Earlier quoted context omitted.

Google's value vis-à-vis Exxon reflects Google having a lightly regulated de facto monopoly on search in most internet connected countries, while Exxon is in a fragmented, heavily regulated industry. Technology becoming the driver of the world economy would involve it ( [1] http://www.econstats.com/wdi/wdiv_533.htm [2] https://www.cia.gov/library/publications/the-world-factbook/...

> while Exxon is in a fragmented, heavily regulated industry You seem to imply the assumption that the regulations in the energy industry don't benefit ExxonMobil.

Exxon has run, on average, an 8.6% margin over the last 4 years (FY 2010-2013) [1]. Google runs at double that. This implies (though does not prove) that Google has more leverage in its market than does Exxon.

Do some government policies benefit Exxon? Likely. Does every government tax and regulate Exxon at the maximally efficient rate? No. But that is a far cry from saying Exxon would be worse off if, globally, resource-related regulation was pared back.

[1] https://www.google.com/finance?q=NYSE%3AXOM&fstype=ii&ei=QDv...

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#15

Post by JumpCrisscross »

raldi wrote: post #10
JumpCrisscross wrote: post #5

Earlier quoted context omitted.

Google's value vis-à-vis Exxon reflects Google having a lightly regulated de facto monopoly on search in most internet connected countries, while Exxon is in a fragmented, heavily regulated industry. Technology becoming the driver of the world economy would involve it ( [1] http://www.econstats.com/wdi/wdiv_533.htm [2] https://www.cia.gov/library/publications/the-world-factbook/...

Wikipedia lists the characteristics of a monopoly here: http://en.wikipedia.org/wiki/Monopoly#Characteristics Which of those characteristics do you see in Google?

Single seller - Google commands 2/3 of search engine volume [1] and 1/3 of online advertising [2]. Yes, they have competition, but in several verticals they are the only practical choice. Note that this does not make them an abusive monopoly, which is what those characteristics seem to be describing more than a monopoly per se.

[1] http://searchenginewatch.com/article/2289560/Googles-Search-...

[2] http://www.bloomberg.com/news/2013-06-13/google-is-projected...

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#16

Post by nightpool »

raldi wrote: post #10
JumpCrisscross wrote: post #5

Earlier quoted context omitted.

Google's value vis-à-vis Exxon reflects Google having a lightly regulated de facto monopoly on search in most internet connected countries, while Exxon is in a fragmented, heavily regulated industry. Technology becoming the driver of the world economy would involve it ( [1] http://www.econstats.com/wdi/wdiv_533.htm [2] https://www.cia.gov/library/publications/the-world-factbook/...

Wikipedia lists the characteristics of a monopoly here: http://en.wikipedia.org/wiki/Monopoly#Characteristics Which of those characteristics do you see in Google?

The more accurate list is the "Sources of Monopoly Power":

  * Economies of scale
  * Capital requirements
  * Technological superiority
  * Network externalities
All of these apply to Google, to some extent or another.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#17

Post by vonmoltke »

rayiner wrote: post #11
martythemaniak wrote: post #6

I know it sounds a little ridiculous, but I think Google still has a long way to grow. I can easily see them as the first trillion dollar company and well beyond that. I think they understand the process of re-inventing themselves better than any other tech company. They acquire a lot of companies, some of which continue to grow and change the very nature of Google itself (example Android). They also understand Black…

> I can easily see them as the first trillion dollar company and well beyond that. At least Saudi Aramco, if not some of the other state-owned oil companies, are already over $1 trillion.

In fact, Saudi Aramco's 2012 revenue[1] was greater than Microsoft's market cap (at 4th most valuable us company).

[1] http://biz.yahoo.com/ic/55/55881.html

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#19

Post by cjensen »

Oculus wrote: post #2

Undoubtedly, people will soon scream 'Bubble!', but I believe this is part of the inevitable shift of technology becoming the driver of the world's economy.

Every bubble comes with people who claim a technological shift or other fundamental shift has occurred.

Instead, look at it analyitcally; A P/E of 30ish means that people think Google could grow 3X. Seems reasonable.

Re: Google Passes Exxon to Become Second-Most Valuable U.S. Company

#20

Post by winslow »

_zen wrote: post #9

The thing I wish to see them focus on the most is making Google Fiber everywhere. I wish they would take their ISP division more seriously.

Considering Kansas launched in September 2012 [1] that gives them a year and a half of service. They've already announced Austin and Utah (Utah starting service soon ~Feb 20 [2]). They are having to build new infrastructure to the "fiber hoods" which takes a lot of capital and time. Let alone massive political fights from the current ISPs that are sure to take months of time. I'm not sure how they could be more serious about it?

[1] - http://en.wikipedia.org/wiki/Google_Fiber [2] - https://fiber.google.com/cities/provo/

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