Google is in trouble!

What I trust Anthony is Common Sense, do you own research and do not invest in a company if you do not understand its business model.

 

UPDATE August 9th, 2004

Google settles Overture Keyword Interface patent lawsuit.

www.thestreet.com/_yahoo/tech/georgemannes/10177217.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA[/url]

They had to do this as their entire business would be ruined if they did not settle, one less cloud hanging over Google now!

 

Well I really don't think it was going to put them out of business, but the timely resolution of this does come at a nice time condsidering the upcoming IPO.

Remember though that Yahoo owns Overture and has a hunk of Google too, so the resolution of this was a win-win situation, with Google removing the only serious dark cloud hanging over it, and Yahoo protecting the value of its investment in Google (and picking up a nice chunk of Google class A stock in the bargain)

 

Well Mel, it is ONE less cloud hanging over Google, the way they created the IPO is another, the IPO at this time is a major flop so far. Lets put it this way, it is not the best received IPO in the history of stock offerings like folks thought it would be.

I told you guys in the other threads that this was a great threat to Google (the Overture lawsuit), it could have put Google out of business. Why do you think they paid over 300 million to get out of this hole, plus future royalties?

They have other problems with trademark lawsuits pending (AXA, American Wallpaper, Geico and many others), so they have a lot of cleaning up left to do.

I hope they do well, Google just needs to bring in some fresh ideas and get away from the data mining model and spyware software, a lot of this will be outlawed or rendered useless down the road by new operating systems and software that will prevent the transmissions of page views to third parties.

M$ and Yahoo are already marketing into this desire for privacy (Yahoo anti Adware/Spyware toolbar), M$ will build privacy into the next OS, they are already getting into the AntiVirus business, spyware will be next.

Unless Google changes in a hurry, they will be subject to a lot of future problems, market share will be taken from them by change in laws and in the OS.

 

It's amazing to me how out of touch with reality people become when they end up living in ivory towers. G was once a bunch of down to earth guys, albeit smart, who now don't seem to have a clue and to the rest of the world, seem to be screwing up in a big, big way.

 

Well I guess if you call a multi billion dollar IPO screwing up, then you are right.

Personally I would settle for half that amount.

 

Looking back Mel, do you think that they created a better way to go public, do you think that this IPO has been a great success?

Could it have been handled better Mel?

 

Well since the IPO has yet to complete it is a bit early to start judging it IMO. Only time will tell, but the unorthodox auction format (and the letter from Sergy and Larry to the SEC) certainly created a lot of publicity.

Lets see where the IPO settles, and if the initial selling price drops or climbs.

 

Drops < That's my prediction. It's just priced way too high.

And I'm not just talking about this screwed up ipo. Just look at the tide of sentiment turning against G. Where once G was the SE that could do no wrong, now it seems they can't get anything right. I see so many negative posts in the forums about G nowadays and it makes me wonder, how long can G survive if they keep alienating those that once loved them?

 

http://msnbc.msn.com/id/4900355//

The above article talks about the Corporate Governance issues and the two classes of stock, a money manager that manages 300 Billion gives comments.

If you are interested in more on this, see the IPO pages at www.webcenter.squarespace.com

There are about 30-40 articles linked from those pages for those who want a digest of Google IPO stuff.

 

You can look back for months as to how this was created (The Dutch Auction), this is a creation of Larry and Sergey, they should have let professionals handle the transaction.

You can look at the two classes of shares, one for insiders (class B) and one for bystanders (class A).

You can look at the loss of public trust (at one time this was the greatest IPO in history) and the public relations crisis that exists with the shares that were given as options illegally.

You can look at the loss of faith in Google management that money managers have now, this will cause a great loss of market capitalization for the company.

In the stock market everything is based on confidence and your market capitalization depends on folks perception, right now Google has lost a lot of confidence because of the way the offering was created and handled.

 

Or on the other hand you can look at it as a private five year old company who made a good profit last year, and now will have a market cap of perhaps thirty billion dollars, they will not lose control of the company as they are not offering class B (voting) shares to the public and they are not offering any profit predictions.

Seems to me that if they only manage to turn their private company with assets of perhaps a few million dollars into even a ten billion dollar company they will have done pretty well.

 

I would say you are correct, they have done well, but could have done a lot better with professional management.

Larry and Sergey have this control thing that is already backfiring on them.

Netscape was once worth many Billions on paper too, many of their former executives are running Google.

Second time is always a charm Mel

http://cbs.marketwatch.com/news/story.asp?guid={128900A2-B700-4E09-9231-91348474FC7A}&siteid=mktw&dist=nbi

Read the above article by one of the most respected financial analysts in the world about Google valuation.