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Friday, July 22, 2005

Google, Google, Google - as simple as that

Google's revenues soar to record highs - and it is called a giant already. Its "its quarterly profit more than quadruple, propelled by a rise in online search advertising."

However, is there an end in side? "There "was not as much upside as some had hoped", said Marianne Wolk, internet analyst at Susquehanna Financial Group."

Yahoo signed a similar growth recently, but shareholders dumped the shares. "Yahoo actually beat Wall St. estimates for second quarter growth but, as shown by the hit share prices took on after-hours trading, investors expected them to smash analysts' estimates."

And that is what is normal. I remember when Yahoo's shares hit US$300 - when was that? 4 , 5 or 6 years back. This was the time of the bubble and may be, just may be, no, I don't want to say it. But the law of big numbers is still valid. This means, it is impossible to grow at big numbers.

You can see that Google is searching for higher hanging fruits already - the easy fruits are gone. There is their powerline investment, rumours about Skype, the entering of markets and strengthening of its position. It won't change. What goes up, must come down. The question is, when?

(By Asia Business Consulting)