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Friday, October 20, 2006

Google: Where To Go From Here?

By William Trent, CFA of Stock Market Beat

One thing is official: while a slowdown in ad spending may have affected everyone else, it did not affect Google (GOOG).

Yahoo! Finance reports:
The performance surpassed analyst estimates by a whopping 20 cents per share and underscored the Mountain View-based company’s widening advantage over its main Internet rivals.”The difference between Google and the second and third place players has become enormous,” Global Equities Research analyst Trip Chowdhry said. “This definitely shows that Google is going to own the next generation of the computing environment.”

Most companies find it increasingly difficult to sustain their growth pace as they grow larger, but Google so far has been able to defy conventional thinking.

The question now is whether to consider Google’s addressable market to be online advertising spending (in which case the company has little room left to grow) or total advertising spending (in which case the story has hardly even begun.)

The author may hold a position in the securities discussed. A current list of the author's holdings is available here.

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