When will Google crash come?

Dave Winer says we’ll know Web 2.0′s bubble is popped when Google’s stock crashes.

So, what’s the chances of that happening? Well, here in Wales, I see hundreds of businesses, nearly none of them are on Google. Despite the fact that the local population says they use Google.

Translation: Google’s growth isn’t close to being done yet. Particularly internationally.

Will Barons prove right? I don’t know. I still remember all the pundits saying “Apple is dead.” Or, talk to Robert Hess. When he started working at Microsoft about 18 years ago his coworkers told him to sell Microsoft, thinking there was no possible way for the stock to go up more than it already had (remember, back in the 1980s Microsoft was in the same place that Google is today).

I see nothing that’ll stop Google. Do you?

Or, if you do think Google is overrated, what do you think will pop its bubble?

Some things we’ll watch for: growth slowing. That’ll tell us that Google doesn’t have what it takes to get all these businesses on board.

112 thoughts on “When will Google crash come?

  1. GOOGLE is a good company. But the price of its stock is highly over pirced. The price of under $314 per share is logical and reasonable with PE ratio as well as over-time growth. The investment world should realize this and gradually – in five to 10 days – bring it down. Otherwise many people are going to get hurt.

    If we don’t bring it down gradually, there will be a bubble burst and the market will follow the crash.

  2. GOOGLE is a good company. But the price of its stock is highly over pirced. The price of under $314 per share is logical and reasonable with PE ratio as well as over-time growth. The investment world should realize this and gradually – in five to 10 days – bring it down. Otherwise many people are going to get hurt.

    If we don’t bring it down gradually, there will be a bubble burst and the market will follow the crash.

  3. The difference though, is that Google is not where Microsoft was in the 1980′s. Adjusted for splits, Microsoft IPO’d at 9 cents a share, and rose 290-fold since then. Since Google IPO’d at a market cap of $25B, it would have to be a $7.25 trillion dollar company to do that. The US GNP for 2004 is $11.7 trillion. It can never grow at that rate.

    (Kudo’s to Wynn Quon for all the data in his great article in January).

  4. The difference though, is that Google is not where Microsoft was in the 1980′s. Adjusted for splits, Microsoft IPO’d at 9 cents a share, and rose 290-fold since then. Since Google IPO’d at a market cap of $25B, it would have to be a $7.25 trillion dollar company to do that. The US GNP for 2004 is $11.7 trillion. It can never grow at that rate.

    (Kudo’s to Wynn Quon for all the data in his great article in January).

  5. I think the assumption that Google will crash is a dubious one. They have caught hold of a major disruption in business models, just as Microsoft did.

    I remember in the early 90s people saying that Microsoft’s growth couldn’t justify their stock price. I remember people in the Mid 90s saying it too. Take a look at what Microsoft’s stock price has done since the mid 90s. Yes, it’s well off it’s peak in 2000, and it’s not going anywhere, but its still 4-5x it’s 1995 price.

    As Scoble notes, there are still lots of existing advertisers who haven’t joined the transition, and there are lots of organizations (or parts of organizations) that never advertised before who are starting to take advantage of the ability to narrowly target advertisements and measure/track performance.

    Maybe Google isn’t the ultimate beneficiary of this shift (though they seem to have the strongest position right now). Still I think it’s dubious to assume there will be a major crash in the sector when looked at over the next 10-15 years.

    That doesn’t mean that there couldn’t be hard times over smaller time frames though.

  6. I think the assumption that Google will crash is a dubious one. They have caught hold of a major disruption in business models, just as Microsoft did.

    I remember in the early 90s people saying that Microsoft’s growth couldn’t justify their stock price. I remember people in the Mid 90s saying it too. Take a look at what Microsoft’s stock price has done since the mid 90s. Yes, it’s well off it’s peak in 2000, and it’s not going anywhere, but its still 4-5x it’s 1995 price.

    As Scoble notes, there are still lots of existing advertisers who haven’t joined the transition, and there are lots of organizations (or parts of organizations) that never advertised before who are starting to take advantage of the ability to narrowly target advertisements and measure/track performance.

    Maybe Google isn’t the ultimate beneficiary of this shift (though they seem to have the strongest position right now). Still I think it’s dubious to assume there will be a major crash in the sector when looked at over the next 10-15 years.

    That doesn’t mean that there couldn’t be hard times over smaller time frames though.

  7. “I don’t celebrate sites that do things like that. They are as dead as the Yellow Pages are.”

    Robert, if those sites are “dead”, how come I see more and more of them every day? (Unless you’re backing off your “Yellow Pages is dead” claim, in which case your statement might make some sense.)

    BTW, did you see today that Google waved the white flag regarding “Google Answers”? Yet another failed Google project, but this one failed so dismally as to be cancelled altogether. Score one for Yahoo.

  8. “I don’t celebrate sites that do things like that. They are as dead as the Yellow Pages are.”

    Robert, if those sites are “dead”, how come I see more and more of them every day? (Unless you’re backing off your “Yellow Pages is dead” claim, in which case your statement might make some sense.)

    BTW, did you see today that Google waved the white flag regarding “Google Answers”? Yet another failed Google project, but this one failed so dismally as to be cancelled altogether. Score one for Yahoo.

  9. I think Google has more innovations(either through acquisition/own stuff) coming in marketplace.Be it YouTube, D&S and other stuffs.
    I think if Google can offer much innovative “Vertical search” creating service(through Google CSE co-op), they will able to increase their inventory, spread the AD in various industry segment and multiply GOOG’s capability and market penetration.

  10. I think Google has more innovations(either through acquisition/own stuff) coming in marketplace.Be it YouTube, D&S and other stuffs.
    I think if Google can offer much innovative “Vertical search” creating service(through Google CSE co-op), they will able to increase their inventory, spread the AD in various industry segment and multiply GOOG’s capability and market penetration.

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