Thinking of Buying the Google Icon

Google Inc. (GOOG) shares have tumbled this year from $700 to $433 (U.S.) -- a drop of nearly 40%. Causes include earnings misses and a poor comScore reading for January. There are also fears of a recession occurring and knocking down online advertising revenues.

It’s tempting to buy the dip. I need to do some more research into the company but having watched tech powerhouses come and go over the last three decades, this company just feels like an 800-pound gorilla in the making, another Microsoft.

Driving in the car today, I heard an ad on the radio for a service provided by a company. At the end, it said: “For further information, just visit our website or simply Google our name, SomeCompany.” The way Google’s name has entered the lexicon says a lot: it has a franchise going just like Coca Cola, Kleenix, Gillette, etc.

If the current financial crisis turns out to have the same effect as the crises of 1997 and 1998 in prompting the Federal Reserve to unleash a massive stimulus that results in an extended economic upturn, we could be headed into a period friendly for growth stocks, especially those in the technology sector. Google would of course be at the forefront of this wave.