From Rutland Herald Internet bubble is fluid.
I'm not as pessimistic as Fred Hickey, but I do think people, and analysts should look a couple recents events and reaccess the valuation of Google.
SAN FRANCISCO — Is the Internet bubble half empty or half full?
With Google's stock on a roll, prompting some analysts to predict it will hit $290 or more in the coming months, it can seem like the late 1990s again on Wall Street. Shares in Google have been trading for less than six months, but they have risen 142 percent and the company has a market value of $56.2 billion, equal to that of Starbucks, Nike and Southwest Airlines — combined.
"Of course we're in a bubble again," said Fred Hickey, editor of The High-Tech Strategist newsletter in Nashua, N.H., and a longtime technology stock analyst. But others say that Internet investors have learned to draw distinctions that many failed to make during the dot-com craze.
"The good news here is that investors are certainly proving themselves more selective," said David M. Garrity, an analyst at Caris & Co. in New York. "It's not like we're seeing Internet stocks go up wildly across the board. This isn't the 1990s when all a company had to do is put out a barrage of press releases and see the price go up."
Google is an advertising machine. They get paid from advertisers. Advertising is a cyclical business. There is NO BARRIER to entry for this business. Those are two very big variables to start with.
Pay per click fraud is another variable that is getting more press. Are those clicks really users? Or is there some center that is paid just to click on specific ads.
What happens when brand realize THEY have the power to control their own website traffic. Will there be such a great demand for keywords?
Next, Google just lost their second trademark case. Google's business model will be impacted severely (in my opinion) once we start seeing more trademark owners going after Google. Thats another huge variable that must be considered.
Google's revenue growth (as staggering as it is), is slowing down on a quarterly basis.
What happens when there is more Internet traffic from a mobile than a PC? Will advertisers shift their dollars there? Of course. There will be another Google-like player that provides the method for advertising then.
Find the company that can deliver advertising on a cellphone, theres your next Google.