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To: Lizzie Tudor who wrote (26809)	1/6/2006 1:57:34 PM
From: stockman_scott	Respond to of 57684

Motorola to add one-click Google access to cellphones yahoo.usatoday.com

To: Lizzie Tudor who wrote (26809)	1/6/2006 2:21:50 PM
From: Bill Harmond	Read Replies (2) \| Respond to of 57684

That's why I asked about network effects. I own RNOW, and the growth is about the same between the two. I'd switch and pay up for CRM if there's a case for CRM becoming the "center of gravity."

To: Lizzie Tudor who wrote (26809)	1/7/2006 11:40:55 PM
From: stockman_scott	Respond to of 57684

Is Google a Good Candidate for Rational Exuberance? By ANDREW ROSS SORKIN The New York Times January 8, 2006 Ideas & Trends Is the dot-com bubble reinflating? Last week, a relatively obscure Wall Street analyst named Safa Rashtchy, from Piper Jaffray, became an overnight sensation among the Internet faithful. He predicted that Google's stock price, which has climbed more than 350 percent since its initial public offering in 2004, and was $422.52 at the time, would hit $600 a share by the end of 2006. Mr. Rashtchy's bold forecast recalls memories of the time in 1998 that Henry Blodget, then a young, unknown analyst at CIBC Oppenheimer, predicted that Amazon.com would hit $400 a share. At the time, Amazon stock traded at $242.75 a share; after Mr. Blodget's prognostication, the stock jumped to more than $600. Of course, the story did not end well for Mr. Blodget: Amazon's stock eventually fell back to earth (today, it is trading at around $288, after accounting for splits) and Mr. Blodget himself, who had been hired away by Merrill Lynch with a seven-figure salary after his seemingly prescient call, was barred from working in the securities industry when it emerged that he had touted other companies that were also clients of the firm. No one is suggesting that Mr. Rashtchy is involved in any chicanery, but his prophecy does raise the question of whether analysts and investors have once again become irrationally gaga over the Internet, and Google in particular. Reached on his cellphone at the Consumer Electronics Show in Las Vegas, Mr. Rashtchy acknowledged that his prediction might seem a bit 1999. "It's understandable that comparisons are made to the bubble," he said. "But this wasn't supposed to be a heroic call or to make noise." Still, it was and it did. Shares of Google shot up to $435.23 the day of the report, and had risen to $465.66 by Friday. Mr. Rashtchy said he based his prediction on estimates that were "fairly reasonable" and "entirely supported by historical ranges." So is he right? For whatever it is worth, here's Mr. Blodget with an answer: "No, Safa's not nuts," he wrote on his blog ( internetoutsider.com ). "He simply assumes that Google's recent growth trends will continue in pretty much a straight line for the next two years and that the market will put the same multiple on the stock next January as it does now. And unlike most of the pantywaist Google analyst herd, he's bold enough to stick his neck out." The pantywaists may already be feeling their oats, thanks to Mr. Rashtchy. Another analyst, Mark Stahlman, at Caris & Company, said Friday that Google shares could one day hit $2,000. (Other mainstream analysts, like Goldman Sachs, have raised their target share price to $500.) That is not to say Mr. Rashtchy's forecast is risk-free. Part of his estimate assumes that Google's profit margin will continue to be above 50 percent. That may prove true, but the company is spending more than $800 million a year, and if it decides to spend even more that could squeeze its margin. And remember, unlike many other companies that focus on reaching quarterly targets, Google warned early on, in its prospectus for its initial public offering, about the evils of Wall Street's focus on short-term profits and told investors that it would not concern itself with those numbers. Mr. Rashtchy's prediction also assumes that Google's market share will keep growing, but he doesn't acknowledge that Microsoft and Yahoo are hot on its tail and could begin to eat into its business. But perhaps Mr. Rashtchy's boldest assumption is that Google can maintain its share price at 50 times next year's earning per share. That is simply a function of market psychology, which is a notoriously unstable entity. If investors get nervous about the Internet sector, Google investors will lose their shirts. As for Mr. Blodget, he predicts Mr. Rashtchy may be on the money. "In my opinion, there's about a 33 percent chance that Google's future will be as good or better than he predicts," he said. Mr. Rashtchy, meanwhile, appears a little uneasy about his newfound fame "It's a little embarrassing," he said. "People recognize me when they see my name. They say, 'So you're the guy who is going to take Google to $600.' "

To: Lizzie Tudor who wrote (26809)	1/7/2006 11:55:28 PM
From: stockman_scott	Read Replies (1) \| Respond to of 57684

Google: $600 or Bust? _______________________________________________________ Business Week Online JANUARY 4, 2006 News Analysis By Ben Elgin With at least one analyst saying the shares will skyrocket in 2006, here's a closer look at the risks to the Internet giant's growth trajectory After a year that saw its stock more than double to surpass $400, Google (GOOG ) kicked off 2006 in similar gravity-defying fashion. Investment bank Piper Jaffray & Co. predicted in a Jan. 3 research note that the search kingpin's stock would climb to $600 before yearend. The sanguine call mobilized Google's boosters, elevating the shares 5%, to $434, by the close of trading. But hold on a minute. Google at $600? A year ago, it hovered below $200. Just six months ago, BusinessWeek Online contemplated the plausibility of Google topping $300 (see BW Online, 6/1/05, "Google at $300? Hold That Cringe"). Sure, our verdict was cautiously upbeat, and the company has since outperformed even the rosiest of expectations. But at what point does Google's stock price go from rich to outlandish? (You can let us know in our Reader Survey.) "REASONABLY PRICED." Given the amount of risk associated with Google's business, it appears to be approaching this run-and-hide territory today, let alone at $600. Despite its glowing successes, Google still gets almost all of its business from a single source of revenue -- one that's maturing and slowing in growth. In addition, Google faces deep-pocketed competitors that will likely figure out how to mount a more successful challenge to Google's search stronghold and at least slow its advance across the globe. "The stock is reasonably priced right now," says Scott H. Kessler, an equity analyst at Standard & Poor's, which has a $428 target price on it. "A lot of people aren't cognizant of the many risks and negatives related to Google." "GOOD AS IT GETS." To be fair, it's pretty easy to miss the negatives. Google vaulted to more than $6 billion in gross sales last year, according to analyst estimates. In a blink, it has entrenched itself as the biggest player in the online ad market worldwide. Despite this newfound girth, Google's anticipated growth rate is more than double that of other Internet highfliers, such as Yahoo! (YHOO ) and eBay (EBAY ), according to Pacific Growth Equities analyst Derek Brown. "As a framework, it's about as good as it gets," says Brown, who doesn't offer a price target on Google. Granted, all of that may help explain Google's stratospheric position today. But a $600 price tag would make Google the 10th-richest U.S. corporation by market cap -- ahead of giants Intel (INTC ) and Procter & Gamble (PG ) and right behind the likes of Pfizer (PFE ) and Wal-Mart (WMT ). That's heady company for an outfit that recently turned seven years old. LOSING STEAM? When a company is priced to perfection, its warts deserve closer examination. And the lack of revenue diversity is perhaps the biggest worry. Google is estimated to have generated 99% of its $6 billion gross sales last year from a single fledgling concept -- selling relevant text ads alongside pages of search results and other Internet content. It has been a geyser of a business, going from virtually nothing six years ago to more than $10 billion worldwide in 2005. Google has managed to capture as much as 64% of that, according to Piper Jaffray. But various analysts predict this market's growth will slow to 20% to 40% a year, beginning in 2006. So if Google is to maintain its breakneck expansion, it'll have to outperform the market. So far, that has been easy for Google, which currently owns more than 55% of the global search market, according to comScore Media Metrix. Not only does Google handle the lion's share of the world's searches, it has figured out how to serve ads that people are more likely to click on. In the past year, for instance, Google tinkered with the way it places ads in such a way that the number of ad clicks per search increased by 33% -- enhancements that went unmatched by competitors and straight to Google's bottom line. STIFF COMPETITION. But with growth in the search market slowing, are such gains sustainable? Or has Google plucked all of the low-hanging fruit in its efforts to glean nearly two-thirds of all search revenues? Nobody knows. But it's unrealistic to expect Google to go much above that 64% figure -- particularly with companies like Microsoft (MSFT ) and Yahoo shoveling resources and dollars at halting Google's advance. Already, competitors have placed some major bets that Google hasn't attempted to match. Yahoo is investing heavily in its so-called social search platform. It relies on written comments and input from users to determine the value of Web pages. That's in contrast to current search technology that relies on computers to determine the value. Of course, Yahoo's test project could fizzle. But if it or some other fledgling effort successfully improves search, Google's ability to continue gaining market share -- and propel its stock price -- would be in jeopardy. Google could always jump into new markets. It has dabbled in a business as a media buyer, purchasing pages in print magazines and reselling them to its legions of advertisers. But this pilot project has struggled to take off with marketers (see BW, 12/12/05, "Can Google Go Glossy?"). And some of Google's other horizon-broadening efforts -- from its commerce-search tool Froogle to its Google Book Library Project -- have met with mixed reviews (see BW Online, 12/22/05, "Google's Great Works in Progress"). Rumors now are swirling about a low-cost Google PC or device, after Google co-founder Larry Page was announced as a speaker at a consumer-electronics show on Jan. 6. PICTURE PERFECT? Google's best shot, however, would likely be in expanding into new types of online ads. So-called branded ads, which carry corporate logos or other images, are scattered over most of the Internet. But Google has so far eschewed them for fear of slowing down its site and alienating users. This is about to change, with Google poised to add small images and icons next to its search ads. But even this is fraught with risk. On one hand, the major advertisers moving online -- outfits such as Dreamworks (DWA ) and General Motors (GM ) -- may not be all that thrilled about the brand-building potential of a meager icon or small graphic. On the other hand, such images may be just enough to prompt some users to try the slimmed-down search sites of Yahoo (search.yahoo.com) and Microsoft's MSN (search.msn.com) -- both of which have struggled to differentiate themselves from Google. Make no mistake: Google's position on the Web is the envy of every other company it competes against. And most bankers expect Google's stock to continue climbing, at least to some degree. "I wouldn't be surprised to see Google hit $500 in the next 18 months," says Ken Marlin, managing director at investment bank Marlin & Associates. But with Google nearly saturating the single market from which it derives revenues -- and easy alternatives scarce at best -- investors need to question just how much potential is left in this stock.