While I tend to agree that GOOG is over valued, I have a different theory why. I don't think they are truly an intermediary. They are in fact 'distributors' of ads. They have the medium (their entire website/partner network) and they know where to put your ad (content-matching). For the advertiser, it is a definite win because they know they pay only for relevance (pay-per-click) and for customers it is a win because they get ads that are related to what they are looking for.

I think google's problem is that it has only one product. Search-related ads. What if that market gets saturated? How will they grow, besides increasing their ad-sites network? How can they make more revenue without increasing the product line?

I think Yahoo is better placed because of the wide portfolio of products and services it offers. I like Yahoo, but the analysts have already figured out that Yahoo is a good buy, because of the wide range of products and services. The stock price reflects that, as well as the level of dilution of common stock. Yahoo is a much (relatively) older company than google and has diluted its stock quite a bit.

But if I had to put my money into one of them it would be Yahoo for sure. But for somewhat different reasons than yours.

At least we agree that it is not worth investing in GOOG
RPM | Homepage | 04.26.05 - 6:23 pm | #