Google Must Be 'Terrified' Right Now

Since Microsoft (MSFT) and Yahoo! (YHOO) teamed up! OK, I am kidding, lets face the facts. The partnership between Microsoft and Yahoo! is like the AV club teaming up with the Glee Club to fight the football team. It will be entertaining at first, until the blood bath ensues.

Google (GOOG) is Google and while I think they will eventually be dethroned it is not going to be by either Microsoft or Yahoo! either on their own or combined. Microsoft is one of the most profitable firms ever and the best they can do is Bing.com? This is after MSN.com and Live.com? Seriously, they cannot even decide on a search engine name let alone actually compete.

In my opinion we will see a new search engine emerge in the future that will take Google down, who knows when that will be and what it will look like. While I like Google, it is highly overrated and overpriced; still it is still the best search engine around.

Good luck Yahoo! and Mr. Softie!

Disclaimer – I do not own Google, Yhoo! or Mircosoft.

Comments

[NetNet:]

Although I do agree with you for the most part, your point that Google will eventual lose top seat is questionable. This will only occur, over the next decade, if the government intervenes. This is a very good possibility considering the mood of the current administration attempting to federalize everything under the sun. My only contention is if the fed goes after Google, they should first go after WalMart first.

Jul 30 07:40 AM

[archangelms:]

This guy thinks Google it is overpriced. Its trading at a fwd PE of around 19. Yahoo has a fwd PE of 43, Amazon 44, Biadu of 52. It has mored cash on the books than all three combined. It has 70% of all global search. No debt. They could buy many companies.
If Google split it's stock the amount of times Yahoo, Ebay or Amazon has it would trade around 30-40 dollars. Thats so expensive?

Jul 30 09:22 AM

[archangelms:]

This guy thinks Google it is overpriced. Its trading at a fwd PE of around 19. Yahoo has a fwd PE of 43, Amazon 44, Biadu of 52. It has mored cash on the books than all three combined. It has 70% of all global search. No debt. They could buy many companies.
If Google split it's stock the amount of times Yahoo, Ebay or Amazon has it would trade around 30-40 dollars. Thats so expensive?

Jul 30 09:22 AM

[fatseal:]

I tried Bing. I couldn't find what I wanted, & went scurrying back to Google. Truthfully, the commercials are stupid, searching with Google doesn't return random things you're not looking for. That's what ebay's search is for!

Jul 30 09:28 AM

[learnmoney:]

I think Henry Blodget has it right when he said "the structure of the deal with split responsibilities means it is likely to be a disaster.
Tech companies have a bad record when it comes to mergers and acquisitions and this one is no exception.
The markets usually get it right - Microsoft price up and Yahoo price down.................and to get the whole veture off the ground is going to take a year so in the meantime good old Google will carry on making its business model even better.

Jul 30 10:35 AM

[LarryBlumen:]

Hey, Ray

Nice blurb, but the comments you got are much more to the point.

Do you remember, in "Close Encounters of the Third Kind", when the spaceship fleet starting coming over the Devil's Tower? First, the little scouts zipped by and then the big ship slowly came into view and everybody gasped at the size of the thing. Then the REAL big ship came on. That's Google.

Jul 30 10:55 AM

[MikeCooper:]

Others here aren't giving Microsoft enough credit. I've tried Bing. It's not as good as Google yet, but it is close and that should definitely scare Google. The Google search engine that we know and love is a solid set of core algorithms combined with usage data from years of of use and millions of searches. Eventually Bing will have that advantage as well. The deal with Yahoo gives them sole access to that data. I suspect that was the real reason Microsoft wanted the deal in the first. place. Over the next several years. it will pay off.

Jul 30 11:32 AM

[Ray:]

They haven't split their stock so that is irrelevant. I believe that given the current economic climate and Googles business model it is overpriced, that is my opinion. If ad revenue continues to slip, which it has been recently, the current forward P/E is irrelevant. Frankly, Googles acquisition history has not been that great, Youtube has yet to turn a profit compared to what they paid for it, etc. Long-term the stock is great, I just believe in the near future you will get it cheaper. The article wasn't about the share price of Google either. This is what makes a market.


On Jul 30 09:22 AM archangelms wrote:

> This guy thinks Google it is overpriced. Its trading at a fwd PE
> of around 19. Yahoo has a fwd PE of 43, Amazon 44, Biadu of 52. It
> has mored cash on the books than all three combined. It has 70% of
> all global search. No debt. They could buy many companies.
> If Google split it's stock the amount of times Yahoo, Ebay or Amazon
> has it would trade around 30-40 dollars. Thats so expensive?

Jul 30 12:08 PM

[Ray:]

I implied that sometime in the future they will loose their top position, I never gave a time frame and I do not believe Yahoo or Microsoft will be a major problem for the firm. Clearly I did a bad job of clarifying my thoughts based on some of the comments. This piece was more of a blurb than anything else.


On Jul 30 07:40 AM NetNet wrote:

> Although I do agree with you for the most part, your point that Google
> will eventual lose top seat is questionable. This will only occur,
> over the next decade, if the government intervenes. This is a very
> good possibility considering the mood of the current administration
> attempting to federalize everything under the sun. My only contention
> is if the fed goes after Google, they should first go after WalMart
> first.

Jul 30 12:11 PM

[ddadm09:]

Finally Microsoft has reached a deal Yahoo for an internet search partnership. Will the newly announced deal between giants Microsoft and Yahoo be a good thing to them and bad to Google? Got to wait and see. I was just curious to know all the past negotiations between Microsoft and Yahoo so collected all the articles and links (more than 200) related to the current merger and the previous events or negotiations between Microsoft and Yahoo. If you are interested check the link below.
markthispage.blogspot....

Jul 30 08:33 PM

[Moon Kil Woong:]

As we noticed with BoA's merger, a weak player teaming with a weaker player just drags both companies down (Microsoft is the worst player in this case). Yahoo will probably end up worse off employing bing than not. Personally, I unfortunately tried bing once and wasted my time.

If Microsoft wanted Yahoo they should have paid for it back whenever. After all, they need Yahoo not to make money but to cannibalize Google's revenue stream to weaken it's competitor. Rather than be strategic they took the stingy way out.

Personally, they probably would have lost the war anyway back then even if they boughtt Yahoo, so maybe they shouldn't have done the deal. But if that's the case, they certainly should have dropped it because this foray will fail 99% of the time (I guess Google could do something like ummm sell everyone's IP address information or something). What I'm trying to point out is that there is no strategy or game theory involved in this decision at all. Not that Microsoft should have purchased Yahoo.

Jul 31 09:32 AM