Going Ga-Ga Over Google?

George Ball

Soooooo…unless you've been living under a rock for the past month you, like me, have been bombarded with article after article, story after story, about the pending IPO (initial public offering) of Google stock.

 

The Wall Street Journal has had 118 articles that mentioned or were about Google over the past 30 days, and earlier last month my other favorite source of information, National Public Radio, did a five-part series called "Seach Engine Wars" (most excellent--check it out).

 

As I have dabbled in investing a little bit, and took my lumps when the Internet bubble burst back in 2000 and 2001, I'm especially fascinated with the prospects of this Internet search engine company (and that's pretty much all that they do at this point in time) being valued at upwards of $30 billion. That's more than half-again as much as the market capitalization of Nike, and almost four times the market capitalization of Sears.

 

True, it turns out that Google, unlike most of its Internet bubble predecessors, is a going concern that has actually been turning a profit--almost $100 million in its last fiscal year. But $30 billion!!! That translates to a P/E (price to trailing earnings ratio, one of the key measures of a stock's relative value) of almost 300.

 

By contrast, two of it's nearest competitors, Yahoo and Ask Jeeves, today (May 25, 2004…

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