> They bought youtube and to the best of my knowledge it does not make them any money. Believe it or not, Google/Youtube DOES have a long-term business plan. See, the biggest problem small/independent producers have is getting copyright clearance for things like music and existing footage. The problem is that the individual transaction costs are astronomical compared to the value of the context where it's proposed for use. The legal costs eat the prospective licensee alive... assuming they're even big enough for the content owner (like MTV, or Viacom, or whomever) to bother taking their call in the first place. Youtube's value equation is that they're big enough to directly secure bulk licenses to the entire media portfolio of companies like the above, or at least do it in a way that reduces the per-use transaction cost to the value of the license itself. In the future, when you go to watch Youtube videos, you'll have to occasionally watch commercials... or pay Youtube a monthly fee to remove them. Right now, it's all free... but eventually, Youtube has plans to offer a smorgasbord of video hosting options (all of which include bulk recursive licensing from content owners who'd otherwise have to be negotiated with individually), ranging from "host your video for free and get nothing" (like now) all the way up to "host your video, and collect your own share of the commercial/subscription revenue. Once again, Youtube's specific value proposition isn't just the video hosting... it's the bulk copyright clearance, which for many smaller producers can be an insurmountable hurdle to cross. Also, don't underestimate the value to video producers, even though they themselves might not get direct revenue from people watching their videos on Youtube. Internet bandwidth is kind of like water... in the quantities most people use it in, it might as well be free... but when you need to fill a 30,000 gallon swimming pool... well... let's just say you'll definitely notice it when the bill comes. Lots of hosting and colo companies claim to have "unlimited" bandwidth... but if you actually come anywhere close to consistently using more than a few dozen (maybe hundred) gigabytes per month, they'll unceremoniously dump you as a customer. Getting that kind of REAL bandwidth when you have to buy it is expensive. For an idea, check out the rates charged by companies that will host porn sites. There's a reason why they're so much more expensive, and it has nothing to do with morality or law -- porn sites use UNBELIEVABLE amounts of bandwidth, and generate the most incredible server loads you've ever seen in your life. Hosting videos on your own server might not carry the CPU load coming from millions of hits per minute, but it most certainly WILL use comparable bandwidth. Google, however, doesn't pay nearly as much for ITS bandwidth, because it's big enough to be a Tier 2 ISP in its own right, and peer DIRECTLY with Tier 1 ISPs around the country. That said, I don't think Google's likely to drop below $100, but it wouldn't surprise me if it dips as low as $140 or 180 by February. Actually, I kind of hope it does, so I can buy a few more shares of it. However, I can guarantee that Google's board won't allow its stock price to fall low enough to make the company a takeover target for cash reserves alone. If push comes to shove, it'll either start buying back its stock, or start handing out dividends to drive the price back up again. To tell the truth, if Google announced tomorrow that they were planning to buy Sun in a stock swap deal (say, 64 shares of Sun = 1 share of Google, with fractional shares either bought out or paid up for $4/ea), it wouldn't shock me in the least. Google's owners view Java as being VERY important in the grand scheme of things, and they're probably the only company (with the possible exception of IBM) who could afford to buy it and wouldn't completely destroy Sun in the process.
> can someone shed light on why android is the 2nc coming? They're like Microsoft -- they're big enough, and have enough consumer demand, to bully the carriers into not screwing with its capabilities in an effort to force customers into "value added revenue" services instead of just going straight to the internet to get what they want. The carriers all hate Microsoft with a passion (Verizon, in particular), but they don't dare to say "no", because if Verizon said "no", Sprint would still say "yes", and take away a big chunk of Verizon's customers. Sprint wouldn't dare to say "no", because if THEY did, they'd lose customers to AT&T and T-Mobile -- neither of whom CAN say "no" by virtue of GSM's architecture itself. There's no way they can stop you from activating your SIM card in an approved phone, then sticking it into a Windows Mobile PDA phone bought overseas. Google is capitalizing on the "Our carrier is a nazi, and we love open platforms" sentiment to do what Microsoft has been able to do, but do it for people who hate Microsoft itself. IMHO, the anti-Microsoft sentiment is misguided for the precise reason that they're the reason WHY we have open PDA phone platforms to begin with (god knows, Palm was too busy on its hands and knees servicing the carriers' prurient interests to fight for the actual customers, and allowed abominations like the crippled Treos sold by Verizon). Nevertheless, that sentiment exists, and in particular it's a very BIG sentiment among the people in the Bay Area who socially hang out with the crowd that owns the biggest chunk of Google shares. Woz himself might have an iPhone in his back pocket, but you can BET he has a HTC phone w/Android flashed onto it in his glove compartment, ready to swap his SIM chip into when the mood arises. There are even rumors that Google is going to strong-arm Sprint and Verizon into FINALLY implementing R-UIM cards as a condition of using their phones. R-UIM cards are basically CDMA's direct equivalent of GSM's SIM cards (in fact, they're an extension of the SIM standard, and are actually compatible with SIM cards as well). If you have a Sprint or Verizon PPC-6700, take out the battery and look at the cavity roughly the size of a mini-SD card. That's where the R-UIM card was supposed to go, and in fact IS, in 6700s that get sold in India, China, and just about everywhere else in the world. Why do Sprint and Verizon hate them? They're loath to spend a cent more than they absolutely must supporting anything that's not a deal-breaker for millions of customers. For people with expensive PDA phones, though, it's a VERY big deal, because it means you can buy a cheap $10 phone on eBay to put your R-UIM card in when you go to the beach or go canoeing, instead of endangering your $500 PDA phone.
Larry Page is that you? This post is a reply to your 2. Nobody will care about youtube once you have to pay for it. The whole point of youtube is that you can watch all kind of videos for free (including all kinds of copyrighted video). Whereas Apple leveraged "coolness"/usefulness of iPod to make people pay for music, nobody really needs youtube. FYI Google is not strong enough to strong arm anyone(in areas beyond paid search). It has intense competition from Microsoft (in everything but search engines) and Apple. That is why it does not have a chance. Problem with google is that you don't monetize free(non internet search). All the office apps from google won't make a dime for it, neither will google earth, google search(desktop search), google toolbar, chrome browser and other craplets that it is fond of producing.
Can't say I have them in my phonebook, as much as I'd love to get invited to their parties and play Segway Polo with them on weekends ;-) In any case, Google's importance transcends the individuals who started it. Anyway, Android DOES have one strength over Windows Mobile -- it's not completely dysfunctional as a UI for placing actual phone calls. Like everyone else with a WM6 phone (HTC Touch), I have a major love-hate relationship with it... I love having a baby laptop with me to play with and get online whenever the mood strikes. I hate trying to pull it out of my pocket when it's ringing, and have it send the call to voicemail because some idiot at Microsoft decided that the original behavior (turning on the display, but disabling the touchscreen and only responding to the hardkeys) was inconsistent with their user interface guidelines, and forced an update so that NOW, trying to fish the ringing phone out of your pocket risks accidentally pressing one of the soft buttons on the screen. That's Microsoft's biggest single problem... their obsession with platform consistency, even when it proves to be actively harmful to real users. They don't set out to be evil... they just end up occasionally getting consumed by their own self-righteousness and doing stupid things for blindly ideological reasons. Let's just say that the day Adobe bought Macromedia instead of Microsoft, millions of developers sighed with relief, envisioning the utter destruction of apps like Dreamweaver had Microsoft been allowed to mangle its UI to favor inexperienced users who know how to use Word instead of acting like an extension of one's own consciousness to people who work with it all day, every day to get real work done (Dreamweaver's like Photoshop... it takes weeks to learn how to use, but once you learn how to use it, everything makes sense, and things that SHOULD be straightforward to do end up BEING straightforward to do... even if that way isn't necessarily obvious to someone who didn't read the manual).
In this current market we have P/E's in the 1's and 2's, explain to me why in this environment GOOG is buy with a P/E at a 16?
At $260 GOOG is on a huuuuge Boxing day sale. This is going to $800 in 2 years. GOOG is a very healthy company with no debt, great leaders, great management, plenty of cash. The opportunity is right here, right now. Buy soon before it's too late. Port1385 and stock_trad3r are buying too. GOOG, AAPL, V, RIMM have absolutely bottomed last Friday. They're all going higher soon.
> In this current market we have P/E's in the 1's and 2's, explain to me why in this environment GOOG is buy with a P/E at a 16? Basically, zero risk that Google won't continue as a going concern for the conceivable future. It has zero debt, positive cash flow, and asset-wise is one of the richest companies on planet earth. From what I understand, a good portion of that wealth came from buying lots and lots of dark fiber in 2001 or 2002 from a bankrupt ISP. They apparently bought it for a pittance, because nobody thought that we could ever possibly max out the fiber that was already lit, let alone find new uses for it. Google looked at it, and thought, "Hmmm... one on one on-demand high definition video @ 20mbit/sec per viewer..." Google had their own video service before they bought Youtube, but no real idea how to run it, and didn't have any clue how to deal with companies like Sony & Viacom. Youtube, on the other hand, knew how to navigate the legal minefield, but was getting eaten alive by data charges they had to buy at market rates. Ergo, a perfect marriage... Google's basically "free" nearly-unlimited bandwidth to the rest of the internet, Youtube's brand name and management know-how.