The growth rates are not all in the past for every company.
Let's just take the advertising side for starters -
This year, about 540 Billion (10**9) will be spent on advertising world wide, out of a world GDP of about 45 Trillion (10**12)
About 8% of the 540 Billion will be spent on internet advertising, or roughly 40 Billion.
In 4 years that percentage will go to about 20% of all advertising, about 120 Billion.
Very strong reasons for this, efficency, tracking what works like direct mail, much lower cost, etc.
So we have an additional 80 Billion a year. Some goes to Google, some to ad agencies, and some of that 80 Billion will support new capital spending for routers, fiber optics, storage, etc.
*****there is a lot more going on than advertising
****************
I will agree with you about the competition - that's why we need to look for companies with franchieses, barriers, lock-in , stickyness, intellectual property, critical mass, etc.
Like
Apple with proprietary systems, iPod, iTunes
Ebay with critical mass
Google with critical mass
MySpace with critical mass
Quicken/Turbo tax (Intuit corp.)with lock-in all your previous tax data
Oracle with lock-in
Electronic Arts with the Madden football game franchise.
Notice that some companies, like Sun, have very little, and are effectively commoditized.
The video website companies, like YouTube, are also commodities.
The tech sector will require stock picking this time. |
