Online Advertising Growth Rates

What will be googles stock price at the end of the year?

Google’s price has been hammerred for four reasons:

1) Higher than average P/E ratio. This is because Google’s profits have been growing at a huge pace. Which is better:
Stock A: $20 in year 1, $25 in year two, $29 in year three
Stock B: $20 in year 1, $21 in year two, $22 in year three

2) High price (but not necessarily over-priced). People will just look at a $500 stock and say “too expensive” without asking why it costs so much. My question: which is a better value:
$500 dollar stock making $20/share:
$50 stock making $1/share

3) Online advertising could be negatively affected by the recession, hurting Googl’e growth rate. Google’s 1st quarter results will be released in April, giving us the answer to this question.

4) All stocks, especially tech stocks have been falling. They could fall further.

In Answer to your question:
Dow <10,000: bigger problems, who knows? Dow 10 -11,500: Google: $300-$450 Dow 11,500-12,500: Google: $400-$550 Dow 12,500-14,000: Google: $500-$650 Dow >14,000: Google: $600+

I think that we’ll be either at Dow 11,000 ($400) or Dow 13,000+ ($550).

In two years, Google will be $700+. Their ad business has been so successful, they have the luxury of spending money on new ideas that may take years to develop into proftiable ventures, which means they will continue to have large than average growth rates.

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US Online Ad Growth Slows in 2008


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