Google gives a surprise (GOOG)
After hearing so much about how Google's valuation was insane, about how they couldn't keep up this growth, about how the prick of a pin would burst the bubble, I'm a little shocked that it's only down about 10% today after falling short not only of average estimates but also, one would assume, of the expected "whisper numbers" that can be so important for a very volatile growth stock.
I think it's largely due to the fact that the business is doing fine -- from the call and from the earnings releases it's easy to get a sense that they are investing more than expected and paying higher taxes, but also seeing continuing high growth and continuing to take market share from competitors. For future growth, the controversial decision to cooperate with the Chinese government should also be a huge benefit -- Chinese searchers can still use the US-based servers if they want slow, interrupted searching, but they will now also be able to use a local server network for Google's fast, albeit censored, search. That puts them on the same footing as Baidu and the other locals as well as Yahoo and MSN in China, which I think is necessary if ethically unfortunate.
In the long run, meaning after a few more years in my estimation, I expect it to be fully impossible for China to censor the way they are doing today -- the innovation money and brainpower around the world is focused on sharing information, not on restricting it, and the gates will never be as powerful as the invaders. China's censorship will likely be as pointless in the long run as the great wall -- a powerful symbol, but not one whose construction can keep up with the competition.
I'll be interested to see how the GOOG share price reacts over the next few weeks, since I'm still considering selling a small portion, but I think the market has reacted in a surprisingly mature and measured fashion -- a bit of a dip makes sense given the growth expectations that were built into the shares, but I would have guessed this would crater more significantly on the surprising news ... thankfully, it appears the cratering was restricted to the after-hours cowboys.
I think it's largely due to the fact that the business is doing fine -- from the call and from the earnings releases it's easy to get a sense that they are investing more than expected and paying higher taxes, but also seeing continuing high growth and continuing to take market share from competitors. For future growth, the controversial decision to cooperate with the Chinese government should also be a huge benefit -- Chinese searchers can still use the US-based servers if they want slow, interrupted searching, but they will now also be able to use a local server network for Google's fast, albeit censored, search. That puts them on the same footing as Baidu and the other locals as well as Yahoo and MSN in China, which I think is necessary if ethically unfortunate.
In the long run, meaning after a few more years in my estimation, I expect it to be fully impossible for China to censor the way they are doing today -- the innovation money and brainpower around the world is focused on sharing information, not on restricting it, and the gates will never be as powerful as the invaders. China's censorship will likely be as pointless in the long run as the great wall -- a powerful symbol, but not one whose construction can keep up with the competition.
I'll be interested to see how the GOOG share price reacts over the next few weeks, since I'm still considering selling a small portion, but I think the market has reacted in a surprisingly mature and measured fashion -- a bit of a dip makes sense given the growth expectations that were built into the shares, but I would have guessed this would crater more significantly on the surprising news ... thankfully, it appears the cratering was restricted to the after-hours cowboys.
Labels: GOOG
This article posted by One Guy @ 2/01/2006 10:27:00 AM 3 comments
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