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Reasons to be confident about Google stock as an investment

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Google remain an Internet phenomenon and an extremely profitable one. Profits in Q1 were up by 30 per cent to $1.3 billion, well ahead of analysts’ estimates. Revenues grew by 42 per cent to $5.2 billion.

But the best is yet to come from Google. Expect to see the US recession driving consumers on to the Web to find the best deals and for no-cost entertainment. Why pay for things that now come free on the Net? And how do you find them? Search with Google!

Yet behind this market dominance is a brains trust of considerable power. Google has been very clever in navigating the mind-boggling complexity of the billions of networked pages of the World Wide Web. And its rivals are falling behind, with Microsoft’s bid for Yahoo a sign of how desperate they have become.

Super-growth phase

Google still seems to be in the early super-growth stage of a high-tech company, and in buying YouTube it showed a canny ability to tap the next big thing. How long can it keep innovating? When will Google have its Microsoft XP moment and run out of ideas?

Well, probably not anytime soon: Google attracts the best and the brightest as Microsoft once did. What could it offer next?

Perhaps an entire free operating system for a standard PC, or search on mobile phones, or ways to integrate the computer, phone and television that go beyond what we have now. It is hard to say. But with all that ad revenue pouring into Google the funds for organic expansion are available, and could prove the best investment that the company can make.

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Written by Peter Cooper

April 19, 2008 at 9:47 am

Posted in Media, US Stocks

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