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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

#121

Post by KaoruAoiShiho »

brudgers wrote: post #61
frogpelt wrote: post #33

I have to say I don't understand companies that have very little in the way of tangible assets being valued higher than companies that have mounds of tangible assets. For instance, Exxon-Mobil has $347 billion in tangible assets while most of Google's value comes from its brain trust and the vision of its leadership. The same could be said of Apple though they do have $40 billion in cash. In other words, if both comp…

If Google disappeared this weekend, we'd wake up Monday morning and our Android phones would still work, a few people would miss Play and the worst part would be listening to people complain about Bing search and everyone else's maps. If Exxon disappeared I'd be in line at the pump filling up gas cans in addition to the tank and on my way to stockpile canned goods, potable water. and buckshot.

If phones still work then it's only fair to say that the pumps, stations, etc still work and someone would take it over and provide the same services, disruption would be fairly short term.

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

#122

Post by valtih1978 »

saryant wrote: post #47
valtih1978 wrote: post #31

Earlier quoted context omitted.

The oil does not go into gadgets. All the oil goes into your car, http://www.youtube.com/watch?v=rPS1y81b1Bw

We would not live in our current modern age without oil. Moreover, the oil companies are tech companies and have been since before the phrase was coined. What do you think Exxon's R&D budget is for? Exxon has over 1,000 PhDs on staff. Also, when you refine oil, not everything that comes out is gasoline. Those byproducts are a major component of consumer electronics (plastics). The entirety of a barrel of oil most cer…

> We would not live in our current modern age without oil

really? Do you mean that I am an idiot who does not undestand this?

> Exxon has over 1,000 PhDs on staff.

Really? Can I prove that 1+1 = 3 based on that?

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

#123

Post by csallen »

ConnorBoyd wrote: post #95
no_gravity wrote: post #85

Earlier quoted context omitted.

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

Their search revenue is still advertising revenue though

Any two things can be sufficiently generalized to being describable using a single term.

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

#124

Post by dragonwriter »

3pt14159 wrote: post #64
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.

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.

Oil isn't only used as a motor fuel, and the pace at which it is displaced as a motor fuel is unlikely to be great enough to prevent oil companies from continuing to make increasing profits selling it.

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

#125

Post by valtih1978 »

_delirium wrote: post #43
valtih1978 wrote: post #31

Earlier quoted context omitted.

The oil does not go into gadgets. All the oil goes into your car, http://www.youtube.com/watch?v=rPS1y81b1Bw

A good amount of the oil does go into gadgets. Energy, plastics, Amazon shipments, etc. In the U.S. natural gas is also the 2nd-largest fuel source for electricity generation (~30%, 2nd to coal at ~35%).

> A good amount of the oil does go into gadgets.

http://www.thedailygreen.com/cm/thedailygreen/images/product...

90% is fuel. Thanks for making me an idiot. You should add that burning that oil in your car helps the gandgets to sustain. You afford much more gadgets to yourself, once the car finishes burning all your oil. Right?

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

#126

Post by boomzilla »

Steko wrote: post #101
boomzilla wrote: post #51

Earlier quoted context omitted.

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.

The idea that revenue from Apple lines quickly fades after 2 years doesn't seem to square with history. Desktops growing for over a decade, finally fading due to laptop cannibalization. Laptops growing for over a decade, perhaps stable now and fading in the future due to tablet cannibalization. Music player grew for better part of a decade until heavily cannibalized by phone. Phone still growing 7 years after introdu…

I get what you are saying. My point is that even in the same product line, e.g. phones/tablets, there is no guarantee that Apple will be able to sell the same number of iphones/ipads in a few years. Case in point:

http://en.wikipedia.org/wiki/BlackBerry_Ltd#Financials

BB was growing like crazy for the whole decade till 2011, consistently ~40% year over year both in revenue/profit AND users. Just a dink in 2012, and kaboom, you know the rest of the story. And note that enterprise email was supposed to be the unbreachable moat for a business.

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

#127

Post by brudgers »

haberman wrote: post #92
brudgers wrote: post #87

Earlier quoted context omitted.

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.

15 years ago Apple was a dividend paying manufacturing company. It had not been a growth stock for many years. 15 years ago the standard wisdom was AOL and Pets.com.

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

#128

Post by bradleysmith »

3pt14159 wrote: post #64
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.

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.

This is a very cut-and-dry explanation that sells Exxon's future value (and our reliance on petroleum products) way short.

Production of electricity is more efficient than production and refinement of fossil fuels. BUT, Expenditure and distribution of that energy as electricity is less efficient for use as a transportation fuel (as I understand it; correct me if I'm wrong!). This is particularly true for heavy-load transportation like 18-wheelers and industrial applications. Until battery and electric motor technology improves to provide more torque for longer periods of time, fossil fuel will be responsible for moving our STUFF around via diesel motors. The moving of that STUFF still represents the majority of our transportation fuel burned.

Exxon is also a very large investor in electric vehicle battery tech, which will be one of the key technologies to change our transportation reliance from fossil to renewable.

Also don't forget about plastics as a petroleum product; I think it will be some time before we replace plastics as a common building material.

Granted, Exxon only spends ~3% of their profits on research of any sort, which is probably less than their advertising budget, and they spend less in a year on R&D than Google does in a quarter.

I don't really mean to start an argument, and I do hear your point. Exxon is the leader in a dying business. Still, Exxon isn't ignoring the puck. They're probably as aware as anyone where the short-comings of fossil fuel transportation start and stop, and they are as interested as anyone in technology that will upend that industry.

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

#129

Post by cbr »

calbear81 wrote: post #86
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.

- Self driving cars - Robotics - Connected home electronics (Nest, etc.)

"in terms of revenue"

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

#130

Post by cbr »

mcherm wrote: post #97
suyash wrote: post #84

Earlier quoted context omitted.

"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…

How does this square with tech companies generally not paying dividends?
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