Google could well be the poster child for my thesis on the importance of focusing on and evaluating more relevant specifics than on lesser important generalities. The general idea of a deep recession like we are now in implies shrinking business. Google however reported growth for the first quarter, handily beating consensus estimates. Google is demonstrating itself to being very resilient to the economic downturn, although growth has slowed down, nevertheless it’s still growing. Paid clicks were up over 17% for the quarter indicating there are still oodles of Googles going on.
The longer term perspective provides even more compelling evidence on the importance of specific considerations over generalities. The growth rate of Google since inception bears no resemblance to the growth rate of the general economy. Clearly, Google possesses its own unique drivers independent of the state of the economy and shareholder returns also had no correlation to the general stock market (S&P 500). Check out today’s FRAT™ Videx™ for the conclusive and compelling evidence that back up these statements!
FRAT™ VidEx™ (click to open in full screen)
The author manages portfolios owning GOOG.
When looking at a company like Google, it’s enlightening to think back a decade to 1998 when Stanford PhD students Larry Page and Sergey Brin founded the company with the silly name. Who in their right mind could have imagined how disruptive Google would be to the mainstream media and advertising industries. As technology continues to advance at an ever increasing pace, you might be wise to ask – WHAT’S NEXT?
Tags: Google
[...] http://www.themarketsupchuck.com/blogs/?p=247 June 14th, 2009 | Tags: Earnings Growth, Fundamentals, goog, Google Inc. | Category: Earnings Growth, Fundamentals, Valuation | Leave a comment [...]