One Family's Blog

Google/ Microsoft Ad Wars: A Contrarian Viewpoint

Hi yohoho:

Here is the information you are looking for - Below is the chart from Google (click on the 10-year link):

finance.google.com/fin...

If you look at the time period between 2001 and mid-2004, the price saw a low-point of $4.4 on 9/28/2001 and stayed in single digits till well into 2003. MSFT had plenty of cash to fund the acquisition at even 5 times the price at the low point and still come out ahead. The special dividend was given out the 2nd half of 2004. Please see the link in the article (pasted below for your convenience) for the exact details:

www.usatoday.com/tech/...

Regards,
One Family's Blog.

Google: A Hard Sell For Superior Returns

You are absolutely correct. The calculation should use nominal GDP. That number for 2006 was $13.2T. 10 years out, it will grow to $21.5T at 5%. Google valuation will have to be between 5.4% and 12.6% depending on the growth assumption of 23% and 34% respectively - again, a highly unlikely scenario...

We have changed our blog post to reflect this as well - www.onefamilysblog.com .

Thanks a lot for pointing out this error.

Regards,
One Family's Blog