No doubt about it. Google has the sharpest collection of IT talent working on new Google ideas on this planet.
But that is part of Google's current problems. Since it's public offering Google has taken on a vast range of high tech projects all at once. Not all of them have been well received. And Google pays it's vastly expanded staff very well. Plus fantastic but expensive benefits.
Their bread and butter advertising cash cow, Google Adwords, is showing signs of losing effectiveness and advertisers. The cost of many keywords has been bid up to the point where the advertisers are cutting back on advertising or cutting it off all together.
I have been a long time user of the Adwords service. My results may not be typical but I know I have cut back on advertising with Google as conversions from click throughs to sales have fallen sharply over the past year. I expect that many other small business advertisers, those who closley watch their ad campaigns, have done the same.
Google is still a mighty force with online advertising and a wantabe in off line advertising. However, the combination of a recession, the over extension into new products, runaway expenses of personal, and increased competition will in my opinion bring Google a bit closer to the ground over the next year or so.
Look for Google to eventually work it's way down to a $250 to $300 stock.
$438.42999 (03/24/08)
