full disclosure: i was interested to buy shares in the IPO at around $100-125 with optimism, and did so with extreme glee at the actual $85 IPO price. i sold 1/3 at $100, another 1/3 at $125, and the final 1/3 at $180 less than 4 months later — and at that time, i felt like it was just getting too rich for my taste… i was pretty happy with more than a 50% return less than 6 months, but i was no longer bullish at that price.

now based on the last 4 quarters of earnings, had i not sold i’d probably now feel comfortable hanging in there at $300, and buying anywhere south of that. if they pull out another 4 quarters of revenue AND earnings growth, then maybe i’d be comfortable at $400 — but by then who knows, the market may be pricing them at $600.

in any case, the game is way too momentum-driven for my blood these days. i’m a huge fan of Google the company, but not a huge fan of GOOG the stock.

my $1.02,

• dave mcclure

The bottom line: don’t think about Google quarter to quarter. Think about how well they are doing at trying to make all the world’s information accessible. From where I sit, they are doing pretty well, given they have the most influential global brand, nearly a majority of all searches, and certainly one of the most powerful ad networks on the net.

I started at Y! when it was <200 people, I left when it was >3,500 people. When I started at Y! I was interviewd by 12 people from the COO to a surfer. By the time I left, HR vetted everyone and the hiring manager chatted for a half hour or so and an offer was made. Either hiring screening is slipping or the managers are doing nothing other than interviewing. Neither of these things are good. Even if they are getting good people, I very much doubt that Google can integrate all these people they’re hiring effectively at the rate they’re coming in.

I don’t see Google’s weakness in their engineering group, I see weakness in their product management. You can have the smartest people in the world on a product and if they’re all going in different directions they are not going to build good stuff.

They have yet to prove they can build a complex consumer product well. They have nothing anywhere nearly as complex or sticky from a user standpoint as Y! Finance or Y! Games.

Google does search very well (mostly because of the simplicity of the consumer experience).

Google does mail well (but so do lots of outfits). Mail is a loss leader to drive registration data.

Google does maps well.

Froogle is terrible

News is mediocre

Video Store is terrible

Their advertiser tools are a pain to use at best.

They have an awful lot of people working there for the number of products they have.

One thought I have is that with a lower stock price, it may be harder for Google to attract good people (options are nice when you always go up) and it might free up some money for new R&D or when needed to go out and buy someone. So if anything, the stock drop is good for the likes of Microsoft, because maybe it will keep Google in their own sandbox, instead of going into Microsofts. Personally, I think maybe Microsoft is playing in the Search Ad business just to keep Google away from Microsoft’s business. Also, I think they were involved in the AOL deal just to raise the price that Google would have to pay. I don’t think they had any real interest or intention of giving TW/AOL any money, I think they just wanted to make Google pay more for the agreement.

Back to the stock drop, bubbles always go to high and drop to low, thats the way of the market. Could Google drop another $100 or so in shares? Who knows? If anyone knew that, they wouldn’t be posting on the internet, they would be too busy managing their private island.

Also, I don’t know Mr. Hornik but I wonder: is his displeasure not keenly felt and known when any of his startups badly miss making the business plan — even if the raw results are OK?

Google’s valuation is beyond “Om” or “Doris”. No offence. It is a growth stock and laws of Berkshire don’t apply. Let see what Safa has to say. CAUTION! CAUTION! Larry and Sergey are selling their own stock(options) as if their is no tomorrow.

you are missing the point here. did i say anywhere, read the post and the article again, that the stock price and expectations are realistic? no i did not.

i am not saying that the huge stock prices etc are realistic. if you have been reading the blog for past few months, i have been consitent in saying guys, hang on a minute, lets not get too excited.

i am reporting what silicon valley is thinking right now. the report on cnn money shows clearly what the silicon valley community thinks.

on the point of stock price, seriously i cannot think why people should pay $200-$400 for this company. i am not an expert on what motivates people’s greed, but in the end that’s what it is.

clearly at $6.2 billion in sales, if Google is start-up, then i have a waist size of 26. still, i think the knee jerk reaction was clearly on part of the same wall street, that bid up the stock.

If this was a “knee jerk” it was more consistent with reality than the rising price last year. I’m simply floored by those, including you Om, who should know better to imply that this time the huge stock price and expectations are “realistic”.

Oh, really?

“Google punters are going get their shins kicked….. hard.” http://gigaom.com/2006/01/06/google-2000/