The first part of the report - description of the strategic future.
Google has continued growth built into the expectations of its shareholders. Current P/E is almost 30, even in an environment where the average stock prices have decreased - NADAQ from 2700 to 2100. MSFT has a P/E of 13.5. Yahoo has a P/E of 27 although its price is up significantly on due to attempted merger activity which have now morphed into partnering with Google.
If revenue does not increase at a significant rate, then the increasing costs of maintaining their own site network may result in a loss. They have the costs of consolidating a large number of businesses (analysis needed).
Google does list in their annual report a number of pretty big picture risks. Again more information is required on how big Google expects to get. This ties in with my possible future #2 where Google hurts it's brand.
Notes: Claburn How Google Might Fail
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1 comment:
Optimistic view is of course that everything clicks together. Sites/applications generate revenue growth and become products in their own right.
Google works out new ways of packaging these resources into other valuable products.
Google expands successfully into other media, with a lower cost base, greater value and network effects to tie in customers.
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