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Rick Munarriz at The Motley Fool has this to say about Google's valuation.
It's one of the most intelligently thought through articles on Google's valuation I've read.
Nice one - thanks go to Rick for making the discussion about purchasing expected future cashflow - many articles these days are arguments about the company, not the investment.
Thought this was a good article worth reading - which suggests that a slow down of the US economy is not imminent.
The global economy, it asserts, is on the threshold of a decades-long deflationary boom that will lift America and much of the world to unprecedented prosperity. Its optimism stems from a theory that profound economic changes have and are taking place that have been ignored by most commentators -- specifically a business model it calls the "platform company."
Read more about the platform companies at Seeking Alpha and citing such "platform companies" such as Apple, Motorola, HP, Dell, and Danaher, among others.
My view is that the author is bang on the money for platform companies but that he extrapolates into hyperbole on two points: 1) specific companies vs. the economy and 2) the time horizon.
1) I don't see a compelling argument that platform companies constitute a large enough portion of GDP to create a systematic decades long deflationary boom. GM?, McDonalds? there are many, many non platform companies in the S&P 500 and the broader market indexes.
2) Decades? Maybe if you're a stock picker (I'm not) - then perhaps you can get quarters (maybe years) of good alpha from factoring in platform companies, but decades?
puhlease. these platform companies are predominantly growth companies and therefore trading at high multiples - NOT the 17x PE of the S&P500. Example, Apple, a platform company, trades at a 36x PE - the implied growth and cash flow implied cannot reasonable be expected for decades. There is such a thing as competition, business cycles and reversion to the mean.
That said, there are some very good points raised in the article. I think we've got another good year in 2007 and then absolute returns are going to get harder to come by. Maybe, just maybe, I'll rethink my bias toward index funds (or not).
Are page views and unique user metrics passe? - a question recently posed by CNET News.com
Page views, along with unique-visitor counts, are currently the main way to measure Web site traffic. But new technologies like AJAX allow users to get more information from a Web page without reloading, which can throw off traffic data. Now, some industry figures are calling for new metrics.
I think there's an even more important issue: when did page views/impressions and monthly unique users become relevant? who decided that? because it's not very closely matched to marketer needs compared with the measurement your average radio station can deliver.
My view is that before the interactive industry collectively votes on the next new wave of measurement, we should seek to understand the objectives of marketers and then meet and beat the measurement capability of offline media - the places where marketers currently spend 10x what they spend online.
I was chatting with David Smith of Mediasmith last week about this very topic - he's been working with clients since 1989 on cross media planning, from TV through to search, so he's about as good a person to opine on this topic as anyone. If you're a start up with an ad supported web site, you should read his material or listen to him or hire his firm. The money he represents is more important long term than the VC money you covet :)
Before online publishers collectively decide on some alternative metric like "sessions" or "duration" to pitch clients, it might do us some good to get to the root of what our customers are looking for:
By and large, brand marketers are looking for reach, frequency and engagement: (this is clearly different than a direct marketer who's looking to drive immediate sales).
There are tens of billions of dollars currently spent by marketers seeking to influence brand preferences and sales - those dollars are spent in broadcast, newspapers, radio, outdoor and magazines.
Most, if not all of the money spent outside of the web is given reach and frequency measurements while most web sites cannot and instead offer up impressions.
Marketers are wanting us to deliver solutions that:
a) take advantage of the interactivity, integration and innovation that the web has to offer,
b) they are able to buy in scale (as much as we all love the long tail and influential bloggers, few marketers want to spend $50 million in units of $20k - it doesn't work well)
c) come with measurements that are comparable with the rest of their budgeting (reach and frequency).
Dave's reminder is that on web sites, most ad systems are set up to "rotate" advertisers, which means that unless an advertiser buys all of the impressions, they aren't getting the reach of the site, they are getting the reach and frequency of their campaign.
So it stands to reason that figuring out a dependable, 3rd party system for measuring campaign level reach and frequency should be a major priority.
Then our next challenge would need to be how we measure engagment.
If our industry can deliver something simple and better than other media, and we can be more effective and innovative and deliver optimization etc, without the confusion and complexity and ineffiency that clouds online spending today - then we deserve the next $20 billion.
However, if we simply vote on other metrics that don't match marketers' needs, then we don't deserve a dime.
I'm going to try to figure out who's doing what More posts as I learn more. Comments are welcome.
We've been hoping against hope that this wouldn't happen, my heart is so heavy. James Kim was found deceased.
Those kids are so lucky to have parents like Kati and James - they did everything they could to ensure their children are safe. And finally, James gave his life trying to make sure his family would be found. As I father, I hope he knows they are safe, and therefore he knows he did his job as well as any of us could hope to do in his situation.
Our thoughts and prayers are with Kati, Penelope Sabine and the entire family. Our entire company is grieving today.
UPDATE: I've overheard many questions in the news this afternoon about the decisions James took to go search last Saturday instead of staying with Kati, the kids and the car, and also his decision to leave the road.
I am simply speculating here, but here's a theory that makes sense to me, and those decisions strike me as incredibly heroic and amazingly thoughtful for two people who're out in the wilderness fighting for the lives of their kids.
If you think about this in terms of ensuring Penelope and Sabine come out ok, something quite amazing comes out : in both cases James and Kati did the things that would increase the probability of the kids being found, even though in each case, the choice lowered James' own chance of survival and would have been heartbreaking to make.
After 7 days of staying with the car and being together, the fact that James leaves to search for help increases the chances of *either* him or kati and kids being found. And if he's found or gets help, he can direct help back to the kids. If the kids are found, then that's the outcome they are hoping for. So his leaving increases the probability of the kids coming out ok. The decision to the leave the road is the same - if James continues along the same road it wouldn't necessarily increase the chance that *either* he or Kati and the kids are found, because someone finding James would likely also then find the car. So he left the road, hoping to increase the total odds in his kids favor.
James and Kati made the heartbreaking decisions to help increase the odds for their kids survival, and they did this after keeping it together for a week in the freezing cold. They are both heroes.
If you'd like to donate, please go here. http://www.jamesandkati.com/
These good gentlemen are happily chatting away on their cells in Nepal.
by daske
Nice. I'm happy for them.
Everyone else on the planet is able to watch full length feature films, check the latest news, pay for their groceries, text with their children and play world of warcraft on their phone.
Here in the nest of global innovation: California USA, I lose cell reception on my drive home in Marin County, California - *EVERY SINGLE* time.
Sprint's generated something like three quarters of a billion dollars in EBITDA last quarter. You'd think they could find a few bucks to put a cell tower in a major commute area like 101 North out of San Francisco around Sausalito? After all, there are only 38 million crossings per year.
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