Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Alphabet Inc. (Google) -- Ignore unavailable to you. Want to Upgrade?

To: GVTucker who wrote (7466)	2/13/2006 9:56:23 AM
From: KeepItSimple	Read Replies (1) \| Respond to of 15857

any company with a profit margin of 100% is sure to attract competition. if it DOESNT, then something is wrong with capitalism. or were you referring to the clickfraud business model, where individuals can make infinite profits by running clickbots to click on ads on their own websites?

To: GVTucker who wrote (7466)	2/13/2006 10:02:21 AM
From: Stock Farmer	Respond to of 15857

Bingo. Now KIS can put the pieces together. Short term phenomenon, neutralized in the long term.

To: GVTucker who wrote (7466)	2/13/2006 11:32:04 AM
From: Dave	Read Replies (1) \| Respond to of 15857

GVTucker, Because in the long run, price = marginal cost. I agree with you completely (in theory)and while I am hesitant to say, "this time it's different", I believe that what is implicit in your comment is "barriers to entry". While in this business barriers to entry are very low, I would argue that barriers to success are very high. With Google and other sites such as Yahoo, MSN, etc., there is a network effect. The more traffic that is driven to Google, the more valuable and costly advertising is on Google vis-a-vis to other sites. One example that comes to mind is Internet Auction sites such as Ebay, Overstock, and Yahoo!. The latter attempted to compete with Ebay in terms of price, but Yahoo! and Overstock never achieved the scale that Ebay possesses. Of course, implicit in my assumption is that people use Google or other search sites to find products to buy and, as such, these users will click on the "paid" advertising. While there is evidence pointing to the fact that the ROI on internet advertising has declined given (what I believe to be) the run up in pricing, that does not mean that advertisers will use other sites to advertise or that they will pay less for internet advertising. What I believe promotes the growth of "paid search" is whether or not "search engines" are used to buy products and their effectiveness in driving traffic to another site for a product or services eventual purchase. While there will be a land grab in other countries and that outcome is uncertain, I believe that you said once something like this: "Uncertainty creates opportunity" Best regards, Dave