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

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

#91

Post by seunosewa »

wmeredith wrote: post #71
hayksaakian wrote: post #66

Earlier quoted context omitted.

We often ridicule tech companies for having inflated valuations. I don't disagree with this in general. In your specific comparison, which company do you genuinely think will grow more over the next N years? Google has shown the ability to dominate multiple markets time after time. I can't see Exxon as any more than an oil company. There's certainly nothing stopping them (any more than any other business) from innova…

The only market that Google has ever dominated profitably is search engine advertising. Despite, Glass, self driving cars, Android (free), Feedburner (dominated and shuttered) Gmail, Maps, etc... 96%[1] of their revenue is from selling ads. I love a lot of Google products, but the only one they make any money on, is one I despise. It pays for everything else. [1] http://venturebeat.com/2012/01/29/google-advertising/

Why do you despise Google's Advertising services?

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

#92

Post by haberman »

brudgers wrote: post #87
3pt14159 wrote: post #64

Earlier quoted context omitted.

Exxon is sitting on a resource that will soon be replaced with a more efficient one: electricity. It is much, much, much cheaper to produce electricity in coal or nuclear plants and charge cars to run on the road than it is to refine gasoline and pump it into cars. Google is sitting on top of the most amount of information ever collected by any profit-seeking organization ever. Skate where the pucks going man.

25 years ago, you might have said DEC was the puck. 15 years ago, Yahoo. The ball is round, the game is 90 minutes. Everything else is just theory.

And 15 years ago you might have said Apple was overvalued. It goes both ways. But "value of the underlying assets" is a poor way to gauge a growth stock.

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

#93

Post by zevyoura »

brudgers wrote: post #32

Whoopdee shit. If Exxon and Google were both liquidated today which one would produce more cash? Google share prices reflect a speculator's premium. Exxon's better reflect the value of the underlying assets.

Assessing future value is the point of the stock market, isn't it?

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

#94

Post by tedsanders »

ihaveajob wrote: post #83
MichaelApproved wrote: post #79

Earlier quoted context omitted.

I believe one reason why Google and even Apple are able to surpass Exxon is because Exxon pays out a large portion of its profit in dividends while Google and Apple retain much of theirs in bank accounts as assets. If Exxon didn't pay a dividend they'd easily be the largest company in the world with regards to market cap.

I'm not sure that is a correct line of logic. Often, companies pump their stock prices by handing over dividends. That's a sign of a mature company, which can't expect to grow much, but is still valuable to its shareholders if it can provide results in any other way.

No, if the company pays out dividends, its price ought to fall. For example if a stock is at $100, and then pays out $5 in dividends, afterward the price will be $95. The company is worth less after giving away a pile of its cash.

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

#95

Post by ConnorBoyd »

no_gravity wrote: post #85
nostromo wrote: post #62

Earlier quoted context omitted.

My gut agrees. But I'm still wondering what their next hit is. Despite a million products, they're still a one-hit-wonder in terms of revenue.

A two-hit-wonder. 50% of their revenue comes from search and 50% from adsense.

Their search revenue is still advertising revenue though

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

#96

Post by tedsanders »

suyash wrote: post #84
throwaway_yy2Di wrote: post #48

Yet it's so small : XOM ('12) GOOG ('13) Revenue $453 B/a $60 B/a Profit $45 B/a $13 B/a Market cap $393 B $394 B https://en.wikipedia.org/wiki/Google https://en.wikipedia.org/wiki/ExxonMobil (101 for anyone who doesn't know this: revenue is how much you sell, profit is what's left over for shareholders, market cap is how much shareholders think that profit stream is worth). Relevant: check out wikipedia's rankings o…

"market cap is how much shareholders think that profit stream is worth" => Wrong, Market Cap has little to do with what you mentioned. It is calculated by determining the total dollar market value of all of a company's outstanding shares. Ref: http://www.investopedia.com/terms/m/marketcapitalization.asp

Actually, both definitions are essentially the same. The market consensus sets the price.

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

#97

Post by mcherm »

suyash wrote: post #84
throwaway_yy2Di wrote: post #48

Yet it's so small : XOM ('12) GOOG ('13) Revenue $453 B/a $60 B/a Profit $45 B/a $13 B/a Market cap $393 B $394 B https://en.wikipedia.org/wiki/Google https://en.wikipedia.org/wiki/ExxonMobil (101 for anyone who doesn't know this: revenue is how much you sell, profit is what's left over for shareholders, market cap is how much shareholders think that profit stream is worth). Relevant: check out wikipedia's rankings o…

"market cap is how much shareholders think that profit stream is worth" => Wrong, Market Cap has little to do with what you mentioned. It is calculated by determining the total dollar market value of all of a company's outstanding shares. Ref: http://www.investopedia.com/terms/m/marketcapitalization.asp

Actually, he is right.

We presume that no one owns shares of a company just for bragging rights. (This might not be 100% true.) We presume that no one owns shares of a company because they're irrational. (This is 100% false. But hey, economics has to assume something.)

People own shares of a company because they can get money for owning it. They can get money by being paid dividends, and they can get money by selling it to someone else after the price rises (or stays the same, or goes down). That other person will only pay for it based on the same thing: dividends paid plus the value of selling it to someone else.

So the total value of the company should be the current value of the company's total future dividends. We calculate it by multiplying the current price by the shares outstanding, but it's presumed to be an estimate of the future dividend stream.

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

#98

Post by runako »

no_gravity wrote: post #85
nostromo wrote: post #62

Earlier quoted context omitted.

My gut agrees. But I'm still wondering what their next hit is. Despite a million products, they're still a one-hit-wonder in terms of revenue.

A two-hit-wonder. 50% of their revenue comes from search and 50% from adsense.

So half from ads and the other half from ads?

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

#99

Post by gress »

boomzilla wrote: post #51
Steko wrote: post #28

Earlier quoted context omitted.

Agree the sky is the limit for Google's future but there's always some risk that FB or Baidu or someone could come in and take 80% of Google's users. Aso by any reasonable measure Apple's market cap should be well over a trillion. Take away their $165 billion cash pile from their $465 billion market cap, give them 0% growth and you're left with the idea that Wall St's expects Apple to be turning out the lights in 4 o…

The big reason investors are skeptical with Apple is that there is no guarantee they can pull the same revenue without creating a hit product every two years. Once the revenue starts to shrink, things go downhill very quickly.

That's far more true of Google which has produced only one successful product under very different circumstances to the ones they now find themselves.

Google is literally unproven.

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

#100

Post by mkaziz »

tedsanders wrote: post #94
ihaveajob wrote: post #83

Earlier quoted context omitted.

I'm not sure that is a correct line of logic. Often, companies pump their stock prices by handing over dividends. That's a sign of a mature company, which can't expect to grow much, but is still valuable to its shareholders if it can provide results in any other way.

No, if the company pays out dividends, its price ought to fall. For example if a stock is at $100, and then pays out $5 in dividends, afterward the price will be $95. The company is worth less after giving away a pile of its cash.

What's the logic behind giving out dividends then, if you don't mind me asking?
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