I was just surfing through some of Google’s internet news and there are a few topics of interest I’d like to share.
Despite 30%+ revenue growth, Google shares “plummet:” Google is a great company with strong earnings and profit growth. They’ve proven year after year that they can expand their business model and successfully incorporate more online services in a profitable way.
Despite this bullish outlook, even a great company can have its stock overvalued – and this is the case with Google shares when they were selling for $700 or even $500 a piece. After the Friday fall, Google shares are at about a 25 price to earnings ratio – a good, solid number considering their annualized growth rate. If you’re buying at the current price, its a fair risk. A slowdown in online advertising could cause stock prices to drop further, but if they stay on the current course there should be marginal stockholder gains by this time next year. If you want to flip these stocks you are on your own, but I’ll be tempted to buy & hold if the price drops again before it starts ticking back up.
Yahoo grabs a bigger piece of growing search volume: While fighting off takeover threats from Microsoft, Yahoo did manage to grab a bigger piece of the online searches conducted in June. Of course, traffic isn’t always the same as income and there are big doubts going forward if Yahoo has the leadership necessary to pull off a successful online business model. I think the Yahoo shareholders probably would have gotten a good deal from Microsoft, and I think the deal was sabotaged so Yahoo’s CEOs could keep their own jobs and save face amongst their peers. The key to that will be to bring some new revenue to the table, or find a better way to convert the traffic they already have. We’ll have to see if they benefit from this recent Google advertising deal or if they’re stuck playing junior partner forever.
Internet Coupons – because we can! I thought this was interesting since I spend a good bit of my time promoting Dreamhost coupon codes: “11 percent of households obtain coupons via the Internet, a number that has risen 83 percent since 2005.”
Obviously, 11% isn’t a lot of people – and its not even close to everyone who is online and has potential access to these coupons. There’s a huge market wide open to get these coupons and discounts into the screens and printers of customers who would actually use them. Affiliate coupon programs allow marketers to share some of the profit when a coupon gets used – so its like free advertising for the company, an income for the advertiser, and a great deal for the end-consumer. I’m predicting massive growth in this field, a niche within many niches that has been mostly undeveloped.
That’s the weekend online businesses wrap-up. If you found an interesting story that we missed, please feel welcome to add it in the comments and get a discussion started up. Otherwise, good luck and happy publishing!