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Friday, May 20, 2005

What Google (GOOG) has in store...

I found the following page with a Google presentation outlining the company strategy. My thesis for Google is that the market is still underestimating the potential for this company. This is largely because investment professionals tend to be very skeptical about believing in the future. I have some aspect of this myself (see: recent HPQ post). However, I believe that GOOG lies in the middle of some very durable, very big trends. The presentation does a great job of outlining this opportunity and giving a snapshot of just what the company is doing on a day-to-day basis to capture the market. You need to have a few beliefs in owning Google:
1. That the migration of TV advertising dollars to the Internet has just begun.
2. Google will be able to achieve substantial international growth.
3. They will develop services in their pipeline that will rival their current revenue and profit streams.
I believe all three are true and that the stock is cheap at current prices in the long term.
The best precedent for Google is eBay. There were lots of doubters all the way up over the last few years. But having a truly scaleable Internet business that appeals to the mass market can be much more lucrative than most investors can imagine.

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