I think that their purchase of Youtube when it was still unprofitable, indeed something of a money whole (and remaining so for years to come too), seeing what it could one day become, proves the business genius of Page and Brin. Same (or similar) with Android. That was over 15 years ago. Why haven't they done anything since? (I'm sure they have, ofc, but not that kind of stuff (at least not that I know of.)
Well, they haven't had to. When you buy Youtube for the same price as Yahoo! declined to buy Google for in 1999 or 2000 (i.e. 1 billion ca.), and Android for 50 mn, and don't do stupid shit just to be active, it's hard to screw up.
Also, their keeping control through issuance of C class shares and A class shares, Brin & Page retaining control of 51 % and thus complete control over the co. (Which is standard in some other countries, but for some reason rare in US. (Of course, an "old economy Google" – Berkshire – did it before them ;-))
Youtube, almost as much as Google itself, seems like one of Buffett's 'inevitables' to me, at this point. Youtube is the only essential place which my AdBlock doesn't work on. And they're able to have two, often unskippable commercials on every clip, no matter how short it is (!). And there's no substitute. Not a one. YT has won, utterly and completely. Are you going to boycott YT and go to – what, Vimeo? Gimme a break. Google won; the will become the #1 co by market cap, probably for a long time and will then be broken up, having to spin off YT, at peak profitability, much like Std. Oil or AT&T or something. This is the Dutch East India Company (VoC) of our time. They truly own the internet, to a large extent. What is more, they are almost "un-overthrowable".
However, it is not cheap exactly. Not expensive either though, and the fact that it is trading at market avg. P/E (although it of course largely "is" the market) seems to me crazy. It is possibly the best company that the world has ever seen. It is as if Gutenberg had a patent or a near-monopoly on the printing press, and were able to have a 60+ % on – not the "personal printing press", i.e the hardware – but the papers, i.e the software, too. It's like owning the distribution rights to all of the books in the world, kinda. (Sounds familiar, no?) |
