Rather than just open mouth and remove all doubt about yourself you should research what you don't understand before criticizing.
First, go over to Yahoo! Finance or Google Finance and search for Google. Look at their competitors. You'll see Yahoo has revenue of 26% of Google's $24.92B revenue, or $6.48B. Google market capitalization is over 6X of Yahoo due to their high revenue growth rate of 23%. In other words, Google has to grow about the size of Yahoo! every year to maintain their stock price multiple, or to make it interesting. Carol Bartz is dead on for this.
Second, Google makes 97% of their revenue from Advertising. They are very good at it, maybe the best in the world. All of those other features do not make money for Google; they drive people to the advertising. Many companies do one thing really well and continue to grow over a long period of time. Google may be one of them; we shall see what they look like in another 10 years.
That being said, great companies innovate, they create new products that change the way we live and work. It can either be by taking an existing product category, dramatically improving it to the point of mass adoption or through creating an entirely new product category, or changing how we view the product. Examples are TiVo changing the way we think of TV. We used to watch according to the networks schedule, now we watch when we want to. That not only changed us, but also advertising of products. Another would be Apple, taking MP3 players and driving mass adoption through a simple, easy to use interface. Or Apple taking what was essentially a dead market, Smartphones, and turning it into a massive growth engine for themselves and others.
Another example is Blockbuster changing how we watch movies, but now it’s Netflix and Hulu changing how we consume content. Isn’t it ironic that Blockbuster, one of the leaders before completely missed the market transformation. That is the challenge for Google, to not miss the next wave in how we interact with the Internet, to continue to be on the forefront. The point is that Google needs to demonstrate the ability to innovate in many different areas to be a great company.
Android is an example of how they are trying to develop new revenue streams that grow the business. The proof is yet to be seen. Creating a mobile operating system that is easy to use, flexible and attracts customers takes talent. Converting that into revenue that maintains Google’s growth is the real goal. Don’t tell me about how many Android based devices have sold; look at how much revenue Google gets for it. Apple it making hundreds per device, what about Google?
Interesting that Yahoo!’s P/E is 29 and Google is 23… Investors have more confidence in Yahoo! maintaining revenue growth than Google right now. Doesn’t it make you wonder why?
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