To put that in perspective, Yahoo's market capitalization before today was over $36 billion. Now, I recognize that Google has far fewer forms of monetizing customers than does Yahoo, less of an operating history, much less transparency, and less product diversity, but based on *relative* value, Google looks pretty decent by comparison.
KaChing!!! Cash out time. Lets see... 150 X earnings 11% net with anticipated deminishing margins A sector so volatile that Google was able to capture dominance in just five years *Relative* value to (currently overpriced) Yahoo, perhaps. But value???? Not at the $16B to $24B capitalization that's being suggested. Google may very well be a great, profitable company, but maaaaannnnn, that's some premium that's being suggested.
Have you read through their S-1? Some of the stuff in there is really wacky and casual. The "Don't be Evil" segment of management's letter is particularly strange. This is certainly not the norm. Most filings with the SEC are written by drones at law firms and accounting firms. They are boilerplate templates that are used over and over, with few details being changed. This one looks really strange by comparison.
Okay, I feel kinda dumb for asking this butttt.... How does Google make money? I was under the impression people just go type in a keyword, search for it, and that's it. How do they have so many employees. What's going on here? Don't kill me!
they have those advertisements (Adwords) plus companies like AOL, Amazon, Yahoo often use Google technology so they make money that way too.
I've always thought about buying stock in Google when it went public. Now tell me, how do you make money on buying stocks? If the price you buy a share for is $10 and then it goes up to $20 and you sell, does that mean you made 10 bucks profit for every share that you bought and then sold?
You guys need to look at the situation a little closer. Google has posted hefty profits over the past 3 years, something very different from the bubble stocks of the late nineties. They are very cautious of an inflated stock price, that is why they are releasing the stock through an auction instead of an IPO. They have a board full of seasoned veterans (all executives from Sun, Intel, Cisco, etc.). They will do fine.
let me try to explain it... when you short a stock you are expecting the price of the stock to drop. in order to profit from that you get someone to lend you the stock and you immediately sell it at the price it is going for on the market. then you buy the stock back when it is at a lower price and you simply give the stock back to the person who lended it to you. lets say you wanted to short 1 share of IBM at $100. you would place the order then you would be given the share by the brokerage or clearing house or whatever and then it would immediately be sold so you are left with $100 in cash in your account. say you wanted to take your profit IBM since it has dropped about $10 and is now at $90 a share. you would use the money you got for selling the share and buy IBM back at $90. you give the share back to the institution that lended it out and you keep the $10. make any sense? its kind of difficult to understand at first.
