Bogatin: Google's search stallion has driven GOOG to a 400%-plus appreciation in just two years. Google's stock price is not sustainable long term, and neither is its domination in search.
Advertisers will not stay blinded by Google indefinitely and users will seek more comprehensive search results, elsewhere.
Sullivan: The proof is in the results. Google's results are as good or better than the competition. Good is also good enough. If the results are good enough-- and they are--people won't seek alternatives.
Bogatin: Google's ambitions are unrealizable, but dangerous. People may "trust Google" now, but "Google 2084" is close at hand.
Google has dibs on our email, office correspondence, financial spreadsheets, health records…and wants to hoard it all, "forever." The vaunted Google "search utility" will know more about us than we will know about ourselves!
Sullivan: If the scaremongering or pessimism is true, then Google's plenty valuable. Having so much data opens up huge possibilities for commercial products and services.
Google could do more to address concerns. But we really need laws to better protect our search privacy and other data. Despite its power, Google can't provide those laws.
Bogatin: The "millions" of businesses and individuals "voluntarily" forking over their proprietary content and personal data to Google "every day," sell themselves and their assets short, while Google's market cap balloons.
Sullivan: Google's the lifeblood of many sites, sending them huge amounts of traffic at no cost. Google's an Internet billboard company, a pretty efficient one.
Bogatin: Google tells Wall Street it can find "new ways to monetize all the time," claiming no "obvious ceiling" to growth, its share price says otherwise, however.
In 2007, GOOG will be negatively impacted by a continued decline in the growth rate of Google's earnings per share. Analysts forecast a 36% growth in EPS for Google in 2007 ($12.63), versus its 78% rate in 2006 and a 172% rate in 2005. As Google's earnings growth slows, its share price to earnings ratio will also fall; GOOG's 2006 PE of 50 is likely to dip to 36 in 2007. A GOOG 2007 fair value of $454 (36 PE X $12.63 EPS) is below its 2006 closing price.
Bottom Google line? Search for a better investment opportunity in 2007.