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Boris Marjanovic

 
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  • The Internet Monopoly I Want To Own Forever [View article]
    Bing's market share has been pretty stagnant. And the market share it did gain came at the expense of other search engines, not Google.
    Aug 14, 2014. 11:37 PM | Likes Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    What can they possibly do? Make Google search break up into several different search engines?

    Google has plenty of competition, but it's not Google's fault that most other search engines like Yahoo! and Bing are terrible. People have the right to use any search engine they like, however, most choose to use Google.
    Aug 14, 2014. 09:56 PM | 1 Like Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    What Google is doing is completely different from what P&G and others did. Google is more like a venture capital firm. Just like a venture capital firm, Google makes many acquisitions/investments because management knows that it just has to be right a small number of times. Just one of these acquisitions/investments needs to succeed over the long-term and it will more than make up for the 100 failures.
    Aug 14, 2014. 09:52 PM | Likes Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    You are correct, a virtuous cycle is common to companies with increasing share and revenue. However, it is also what causes a network effect.

    The definition of "virtuous cycle" is a beneficial cycle of events or incidents, each having a positive effect on the next. This is exactly what a network effect is. Facebook is an easy example. The reason people use Facebook is because their family and friends use Facebook. It is a self-reinforcing mechanism that allows Facebook to be the dominant social networking website. The larger the network becomes the more dominant it gets.

    Google's various platforms like the search engine and YouTube also benefit from the same advantage. Let me ask you a question... let's say you filmed something funny and wanted to upload it on a video-sharing website. Which one would you choose and why? I bet it would be YouTube and the reason why would be because it has a massive user base (meaning more people would see your video). This is a classic network effect advantage!
    Aug 14, 2014. 08:11 PM | Likes Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    Yes, I mentioned that. There are still over 4 billion people not yet using the Internet (which doesn't even take into account population growth over the next 10, 15, 20 years). Google can still easily double in size over the next decade. The addressable market is enormous!
    Aug 14, 2014. 06:08 PM | 1 Like Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    It would be nice if Google spun-off YouTube. But I don't think it's going to happen since YouTube is basically an advertising business just like Google search. In other words, there is no reason for a YouTube spin-off.
    Aug 14, 2014. 05:11 PM | 1 Like Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    This only includes desktop searches (mobile devices are excluded). The same source you gave says that Google controls over 91% mobile market share (which you excluded for some reason).

    The source I used (StatCounter) uses a very large sample size and measures market share based on page views only. Using StatCounter data, Google controls ~90% worldwide search market (PC+Mobile).
    Aug 14, 2014. 05:09 PM | 1 Like Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    Google generates more than enough cash to be able to invest in various non-search related projects. Even if just one investment works out it will more than worth it.
    Aug 14, 2014. 03:22 PM | 1 Like Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    It actually is 90% overall (including China). And Google operates in almost every country on the planet. In most countries its market share is nearly 100%.
    Aug 14, 2014. 03:17 PM | Likes Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    I valued Google two different ways. The second way I valued it was by looking at a conservative growth rate over the next five years. Using this method further confirmed that Google is very cheap.
    Aug 14, 2014. 02:44 PM | 1 Like Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    MrMatt,

    You are correct, SA definitely does benefit from the network effect. Think about it... SA has a huge audience which attracts thousands of investment bloggers/writers. These writers publish an increasing amount of content on the website every day, which attract an even larger audience. I can safely say that SA has a huge advantage over other investment websites. We can even call it the Google of investment research!
    Aug 14, 2014. 02:42 PM | Likes Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    "For the majority of search engine ads today the advertiser pays only if someone clicks on their link. This means there is NO moat advantage for Google here."

    There is a moat here actually. Google controls 90% of worldwide search market share. In other words, this means it has the largest audience. A large audience attracts the most advertisers, which allows Google to earn massive profits. These profits get reinvested back to improve the search engine, which in turn attracts an even greater audience and even more advertisers. This is a classic network effect advantage.
    Aug 14, 2014. 01:33 PM | 2 Likes Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    DFCF is only useful when valuing investments where you know the exact cash flows like bonds and annuities. When it comes to valuing stocks it becomes a huge problem. Change the growth rate by just 1% and you get a completely different answer. Even deciding which earnings number to use is a problem. Should it be net income or EBITDA or free cash flow? Whichever one you decide to use is probably wrong because each one of those numbers can easily be manipulated by companies. Even if you make adjustments to get a more accurate number, in the end it is still an estimate. And just like with growth rates, even if your estimate is off by 1% (will probably be off by more than 10% most of the time) your DFCF model gives you a completely different answer. And what about discount rates? There is more than a dozen different ways to come up with a discount rate. Basically what I'm trying to say is that a simple multiple-based valuation approach is far superior to DFCF.
    Aug 14, 2014. 11:06 AM | 4 Likes Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    You must pay up for quality. This is literally one of the most dominant companies in history. This kind of global market share cannot be matched by anyone.
    Aug 14, 2014. 10:49 AM | 4 Likes Like |Link to Comment
  • The Internet Monopoly I Want To Own Forever [View article]
    Why buy Netflix when Google owns YouTube? YouTube can do everything Netflix can and has the advantage of having a much larger user base.
    Aug 14, 2014. 10:46 AM | 6 Likes Like |Link to Comment
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