Tuesday, June 24, 2008

"I think Google is doomed"
"Google and Microsoft will flip market capitalization values in the next five years."

Well which is it? I don't really know but I do know it was a fascinating discussion between Mark Mahaney, Director of Internet Research for Citigroup, and Karsten Weide, Program Director for Digital and Media Entertainment, IDC...both really smart guys. Weide thinks that Google is toast and Mahaney thinks Google is the next Microsoft (well, actually more than MS in his opinion of future value)...

So here is the prognosis:

Google is going up because 1)They learned from AOL and Yahoo mistakes; 2) They have good leadership; 3) They will maintain their core markets; 4) They have lots and lots of cash (did I say lots?)

Google is going down because 1) They are not diversified enough; 2) Their singular profit center is too narrow; 3) They have nothing to show for their attempts at diversification to date (can you say You Tube?)

Well then, again, which is it?

I am leaning towards the view that Google has some significant problems and will not be the darling of Wall Street in the future. Are they going to run out of gas? It may take a while but I am fascinated by the battle going on between "Cloud Computing" (content) vs. "Search Computing" (well, um, err, that would be search), and who does better at which? Mr. Weide (OK, he is a European but he seemed prettty cool anyway, and he actually didn't crack any George Bush jokes, so I was impressed), says that YAHOO actually is pretty well positioned in the area of content...and that Yahoo will look better in the future than it does right now. Wow! A pretty gutsy comment in light of everything that is going on in the world of Yahoo these days.

One final comment about this whole discussion...Weide made a forceful comment that our whole fixation on engineers at the helm of the internet has about run its course (see above comments on content vs. search), and that while engineers overly dominate both Yahoo and Google these days, that the internet is becoming a media and entertainment industry, driven by consumers (that would be you), and that the powers that be better start making this adjustment soon in their companies...or they will become the next Chrysler of the internet.

Interesting stuff!


HIGH U.S. GASOLINE PRICES WILL LEAD TO "NEW JOBS" IN "OLD INDUSTRIES." What could possibly be good about these high prices to fill up the old AMC Pacer? Well missy, let's just say that shipping is a major cost of business these days, and that low shipping costs and the low value of the dollar have made importing goods a primary reason why we have "off-shored" various businesses over the past decade...so could it be turning back our way? Hmmmmm....you must learn to think differently about the headlines that you read. I will fill you in soon!

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