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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

#131

Post by blah32497 »

Pxtl wrote: post #73
JumpCrisscross wrote: post #15

Earlier quoted context omitted.

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.bloomb…

... I'm actually surprised it's only 2/3. I mean, there are fringe geeks on DuckDuckGo, and IE Windows default search is Bing, but still I've never seen anybody IRL actually open anything but Google for a web search.

The Chinese use Baidu, the Japanese use Yahoo, the Russians use Yandex etc.

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

#132

Post by cbr »

haberman wrote: post #74
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.

By all means sell Google and buy Exxon. Check back with us in 10 years about how that went. > Exxon's better reflect the value of the underlying assets. That's like valuing a car based on the price of the steel it contains instead of where it can take you.

    By all means sell Google and buy Exxon. Check back with
    us in 10 years about how that went.
Note that the expected growth of Google relative to Exxon is already priced into their market caps.

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

#133

Post by gress »

wutbrodo wrote: post #119
gress wrote: post #106

Pure speculation, given that Google hasn't launched a single successful product* since their IPO. *giving things away for free doesn't mean they are a success

Play is expected to be a $3.2 billion a year business in 2014. Where do you set the bar for "a successful product"? $5B/yr? Also I'm not sure if you're also excluding acquisitions from your arbitrary definition, but all the DoubleClick products (DFA/DFP/AdX) were post-IPO and are not even close to the same product as AdSense. Don't mistake "I don't understand what I'm talking about" with "anything that has the letter…

Ok - but accepting this perspective, all validated growth has been growth in advertising. Does the P/E ratio reflect expectations for the further growth of the ad business, or is it speculation that Google can be successful in creating another type of business for which there is no antecedent?

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

#134

Post by cbr »

encoderer wrote: post #35
dmead wrote: post #22

is it still a good idea to buy google stock?

Do you believe Google will be a more valuable business in the future than they are today? I sure do. And i don't have any reason to believe the market has "priced in" the value of Google's future growth. Dollar cost average into it, and be a buy-and-hold investor, and it's hard to go wrong.

    I don't have any reason to believe the market has "priced
    in" the value of Google's future growth
Why don't you think people deciding how much to pay for Google stock are considering Google's expected growth? Google's market cap is similar to Exxon's with far lower revenue and much lower profit.

    Dollar cost average into it, and be a buy-and-hold
    investor, and it's hard to go wrong.
It's not hard at all to go wrong that way: investing in only one stock is unnecessarily risky. If you're picking individual stocks you should be asking "what's my edge?" or "what do I know that other smart informed people don't?" Sure, you see lots of potential for growth at Google; so does everyone else, that's not going to make you any money. Unless you're better informed in a useful way it's much better to just buy a slice of the market with index funds.

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

#135

Post by frogpelt »

pswenson wrote: post #81
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…

appl had ~$160B in cash as of their earning report last week: http://www.bloomberg.com/news/2014-01-28/apple-s-160-billion...

The total of the Cash + Short Term Investments + Long Term Investments is $158 billion+.

I'm not sure if this is the same as cash but it may be.

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

#136

Post by mcherm »

cbr wrote: post #130
mcherm wrote: post #97

Earlier quoted context omitted.

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?

Well, the assumption is that the tech companies aren't paying dividends NOW because they're focused on growth. After they grow they'll pay dividends.

Theory and reality may diverge in this instance.

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

#137

Post by 3pt14159 »

valtih1978 wrote: post #120
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.

More efficient? Are you on drugs?

In fact electricity driving cars is so much more efficient that you could burn gas in power plants and it would still outpace crude internal combustion engines.

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

#138

Post by pyoung »

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.

This is a pretty bad analogy, and even at that, it's not completely thought through. Google is responsible for a lot of the infrastructure on the modern web. Gmail, ad networks, google apps, data centers, etc... If they disappeared this weekend it would be chaos.

If exxon mobile disappeared, we might see an oil shock similar to the one in the 1970's, but more likely, due to strategic reserves, we would see a gradual increase in prices, followed by a ton of investment into increasing production capacity by the other oil companies.

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

#139

Post by encoderer »

cbr wrote: post #134
encoderer wrote: post #35

Earlier quoted context omitted.

Do you believe Google will be a more valuable business in the future than they are today? I sure do. And i don't have any reason to believe the market has "priced in" the value of Google's future growth. Dollar cost average into it, and be a buy-and-hold investor, and it's hard to go wrong.

I don't have any reason to believe the market has "priced in" the value of Google's future growth Why don't you think people deciding how much to pay for Google stock are considering Google's expected growth? Google's market cap is similar to Exxon's with far lower revenue and much lower profit. Dollar cost average into it, and be a buy-and-hold investor, and it's hard to go wrong. It's not hard at all to go wrong th…

Of course the people buying Google stock are considering expected growth. (Though I wouldn't call market dynamics "deciding." You humanized that in an interesting way.). But I don't think all future growth is priced-in to the stock. Nor should it be. The question is, do you think there is upside, can your investment grow as the company grows.

I've always been fascinated by the people who prescribe index funds to everybody as the only right play. Of course I own index funds. Over half my total portfolio is in tax favored retirement accounts and all of that is in low-cost index funds. But if you have more tolerance for risk and a desire to personally manage your money, investing smartly and holding for the long term is a perfectly reasonable and often profitable strategy.

I stand by what I've said. There is no reason for me to believe that long-term value in Google will not be returned to share holders. There is certainly an amount of risk here. But buy-and-hold is a solid strategy IMHO.

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

#140

Post by valtih1978 »

hangonhn wrote: post #42
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

Not it doesn't all go into your car. It goes into manufacturing. It goes into farming, fertilizers are often oil based. It goes into the chemical industry. It also goes into generating power for electricity. How do you think the gadgets manufactured in China gets to the US? On ships powered by oil. When you fly on a plane, what do you think powers those engines?

> It goes into manufacturing.

That is a good manipulation. I do not think that this is a joke becaus you must know that the major manufacturer is the China yet the major oil conumers are Europe and US, http://en.wikipedia.org/wiki/List_of_countries_by_oil_consum.... The consumers consume 15 times more oil per capita than average chaneese (and 3 times more in absolute figures). So, you do not need the oil to produce. You need it to consume.

> It goes into farming, fertilizers are often oil based.

This manipulation is even better. Look at the figures, and try to find the microscope to localize your fertilizers, http://www.thedailygreen.com/environmental-news/latest/oil-i.... You will start informing in only after finish that, ok?

How can you respond such things on the video that I have linked? The western lifestyle assumes that you free-ride a car and live in the suburb. You need a suburb to free-ride a car. This is where all oil goes into. If you rebuild your city into sustainable one, as suggested, http://www.youtube.com/watch?v=ugv0OY6LyuE, you can reduce your oil consumption tens of times. This would cut not only gasoline but also all other expenditures, including car building (this is a major job in the industry, accroding to the 2008 crisis) road building, lighting, other communications and water pipelines, and even home heating, http://sustainability.stackexchange.com/a/2398/476 correspondingly. So, all the resources are consumed by car. The gadgets are orders of magnitude chaper for the environment and do not need the costly subrubs to exist.

The planes are of the same kind. They are a part of your american car lifestyle. They are a stupid waste of the oil when there is a train that is 1000 times more energy efficient (and does not need any oil), once you have a railroad.

So, I am saying that there is no way you can sustain your car. But, the micro-electronics is the tip of the human civilizaiton and you have a choice: either you give up the car right now and keep developing the high-tech or keep driving the car and loose both after 20 years (or may be sooner). If the latter happens, the civilization will never recover since there is won't be any oil in the world anymore.

This is what I say. But, instead of listening that great insight, you feel necessary to support your catastrophic way of life, where you are going to loose everything.

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