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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

#151

Post by millstone »

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 think they understand the process of re-inventing themselves better than any other tech company.

Google has never successfully reinvented themselves. They were founded as a search engine, and that's still what most people associate them with.

I would give the crown to Apple. Since Google was founded, Apple has been best known for the Mac, iPod, and iPhone at varying points, each product eclipsing the prior one in popularity, mindshare, and profit.

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

#152

Post by millstone »

guelo wrote: post #44
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…

That's the thing about Apple, they have $165 billion but they have no idea what to do with it. The only R&D they seem to be able to think of is how to make their consumer boxes shinier. No moonshots, no diversification. That's why Wall Street doesn't see any huge upside.

The market didn't see much upside to AAPL in 2000 either. Boy was it wrong.

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

#153

Post by erichocean »

csallen wrote: post #123
ConnorBoyd wrote: post #95

Earlier quoted context omitted.

Their search revenue is still advertising revenue though

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

No, it's simple: Google is not payed by people for search. They are payed to display ads, whether it is alongside search, or as part of AdWords.

Seriously, are you really arguing that Google's revenues are not primarily from ad revenue? With the sale of Motorola, it'll be back above 90%—just like it was before Motorola.

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

#154

Post by erichocean »

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?

Dividends are not actually the only way to return money to shareholders.

Due to the tax situation in the US, it's more efficient to just buy back your own stock (something Apple's been doing a lot lately). Those function more-or-less-the-same as dividends in terms of returning the profit the company has made back to its owners (so they can invest somewhere else, presumably).

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

#155

Post by chucknelson »

cpncrunch wrote: post #150
wutbrodo wrote: post #107

Earlier quoted context omitted.

This makes approximately as much sense as "Apple is a one-hit revenue wonder: almost all their revenue is from direct sales".

Apple seems to be plateauing in terms of revenue, and although google's revenue is still growing I'm wondering how long it can last. There is only so much advertising that they can squeeze out of the internet. If you look at youtube, they have been putting in more and more ads in the last year which has helped boost revenue, but now there is nowhere left to go. As for their non-advert products: how big a market is th…

> how big a market is the thermostat market...

As has been expressed at various places on the web, the Nest acquisition was most likely about more than just thermostats and smoke detectors. It was probably about good consumer product design in general.

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

#156

Post by lutusp »

chollida1 wrote: post #50
lutusp wrote: post #39

Earlier quoted context omitted.

To answer your general question: http://arachnoid.com/equities_myths But specifically, by the time a company is widely regarded as successful, noteworthy, at the top of its game, the train has left the station. By contrast, Warren Buffett would invest in a "company" consisting of a couple of guys in a garage with a vision for the future.

> By contrast, Warren Buffett would invest in a "company" consisting of a couple of guys in a garage with a vision for the future. I think you meant would NOT invest in that scenario. Warren invests in - companies with strong reoccurring revenues - strong moats around them to protect them from competitors - companies that are the number one or two in their chosen fields two guys in a garage with a vision of the futur…

Buffett is best known for investing in companies that are undervalued. If he simply invested as you describe, he would be lost in a crowd of investors who use the same criteria.

Also it's important to say that some investors are going to succeed by chance, not design, and there cannot be a consistent winning equities investment formula or method. More here:

http://arachnoid.com/equities_myths

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

#157

Post by waps »

WildUtah wrote: post #146
JonFish85 wrote: post #80

Earlier quoted context omitted.

Exxon Mobil isn't going anywhere. As oil-usage decreases (which is still likely a long ways off), I'm sure they'll be right there to provide whatever the next energy source is.

Actually worldwide oil usage peaked in 2005 and has been gyrating around that level ever since. About half the months since then have seen decreases and half increases, so it's not a long way off. It's almost a decade ago. Eventually heroic measures will start to fail and usage will be dropping every month for the next century as the oil fields slowly dry up.

It's not just that. Investment projects to increase oil output are having costs going through the roof :

http://online.wsj.com/news/articles/SB1000142405270230327770... (just an example)

But it's not just that EREOI in Saudi Arabian oil is projected to be at most 10 currently (down from > 30). While that's not that serious, it is decreasing exponentially and a value of (Why ? At EREOI of 10 you have to "waste" 11% of oil, up from 4% at 30. However at 5, the factor becomes 25%, at 4 it's 33%, at 3 it's 51%, at 2 it's 100%), note that current total reseve oil output is 2% at best, and minimum depletion rates are 7%.

Here's the net problem : the world will run out of oil in 6 months - 12 months. The US has a stay of execution though, but not for long : 2-3 years at most, and the US will need to implement protectionist measures to keep oil at a reasonable rate. Given what happened every other time we have a few percent drop in oil availability, I'm expecting a total stock crash and a new crisis by the end of the year.

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

#158

Post by igorgue »

wutbrodo wrote: post #104
igorgue wrote: post #77

Earlier quoted context omitted.

I was thinking about it last time. And it's sad that it's 2014 and most tech companies that get tons of press and admiration make money with advertisement, something we all hate.

> something we all hate Doubtless there are some (perhaps even many, in certain circles) who would rather pay directly for services, but you're sorely mistaken if you think that it's anywhere near-universal (even on HN/in tech) that people hate ads more than they hate paying. What you actually mean is "something we all hate, given that we feel entitled to getting services completely for free".

Yeah you're right :)

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

#159

Post by rieter »

erichocean wrote: post #153
csallen wrote: post #123

Earlier quoted context omitted.

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

No, it's simple: Google is not payed by people for search. They are payed to display ads, whether it is alongside search, or as part of AdWords. Seriously, are you really arguing that Google's revenues are not primarily from ad revenue? With the sale of Motorola, it'll be back above 90%—just like it was before Motorola.

No one is arguing Google's revenue is mostly ads. It just doesn't mean Google is a one-hit-wonder. There are different advertisement products.

You could generalize any company that way. Apple would be a one-hit-wonder who's revenue comes from one source - selling consumer electronics.

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

#160

Post by raldi »

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 Exxon disappeared, I'd ... go to a different gas station.
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