Thursday, October 20, 2005

King Google: Search Giant Smashes Estimates

Talk about a blowout quarter.

Google threw every Wall Street analyst through the windshield late Thursday after reporting incredible, eye popping numbers.

I can't think of one analyst on Wall Street who sees any slowdown in Google's future.

In case you missed it, Google said late Thursday that it grew its earnings sevenfold from the same period year ago.

We'd be sellers of Microsoft here.

In a book called The Rule of Three, J. Sheth argues that most industries are dominated by three broad-scale suppliers with a few profitable specialists.

The math isn't complicated: Google is the leader of its pack and Microsoft is chop liver.

With the numbers Google's currently banging out, Google deserves a higher multiple.

Don't forget about Google's $7 billion dollar cash horde, either -- GOOG has been using it to tap into new markets and grow market mind share.

We expect Googles' share price to pass the $375 mark by year end.

We have a long-term $450 price target on shares, assuming GOOG can sustain this torrid growth.

The online advertising space is growing at a 30% clip -- fact!

Google's success embodies the inefficiencries of print media and the blazing growth of paid search.

Lastly, Google seems to make money no matter what what the macro picture looks like -- cyclicality and seasonality are NOT in its lexicon.

Welcome to Web 2.0, Mr. Softee.

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