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A CNN Money story surveys analysts
who remain uninvested in Google stock, and who talk frankly about the downise risks of the investment. Their remarks
touch on the sustainability of Google’s business model. The consensus among these holdouts is that while Google is
taking advantage of extraordinarily favorable conditions for a search advertising company, the long-term future
requires some kind of diversification. In other words, Google is a one-trick company operating in an environment in
which that one trick is booming. Also, they say, Google’s business is misunderstood by many investors, who think Google
is a tech company rather than a media company.
It seems to me that Google’s diversification takes the form of establishing new realms for search advertising. Froogle
and Gmail are both breakthroughs in this regard. Taken to the extreme, Google would present contextual ads at every
step of the user’s entire online experience. It’s still just one trick, but a gigantic footprint can help guard a
company against cyclical downturns.
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