Google and $1 Trillion Market Cap
That’s what David Forrest aka TMF Bogey from Fool.com says in this commentary. He calls Google an economy unto itself and partly he is correct. Of course, as Russel Beattie pointed out, somebody should really think about going into the Google market based on their profits. Online Advertising is supposed to be at 16 billion USD by 2009. If we presume a 20% rise for another 15 years, then we are at 246 billion USD. Now lets presume Google gets 20% of that (woohooo! :)), meaning 25 Billion USD. Then at the current price/sales ratio they would be worth 500 Billion USD. But the 20% are doable, seeing that in 2004 online ad spending was at $8.4 billion and Google made roughly $3 billion. I am starting to wonder if some numbers aren’t off here … :) And Google still didn’t ask any of their users for money.
The thing still holding me back is the click fraud problem and that almost all of Google’s money is based on clicks, which can easily be faked. I still don’t know what will happen when a real click fraud problem hits Google, so I am really wondering if this revenue can be held up. I thought I’d come out claiming that TMF Bogey was nuts but I am starting to crumble a bit here. Not buying Google stock just yet, but starting to wonder. I know the power behind AdSense and AdWords and Optimization of the process in general. I have some ideas how they could go about in the future. Still wondering.