Google's Q1 Insane Profit
4-19-07: What is left to say that has not yet already be said about Google? Whatever they are feeding their employees in Mountain View, CA must be quite good because this company is growing faster than the weeds in our backyard. Google’s Q1 profit makes Yahoo! and Ebay’s earning look ridiculous. It is like the race between the tortoise and the hare. Looking at the top and bottom line growth, Google deserves its high valuation. At this rate, Google could rule the internet in short time. In the first quarter of 2007, GOOG posted $1 billion in net profit, a 69 % increase year over year. This stock should be trading over $500 per share.
Based on these impressive numbers, it is clear who the winner is. Yahoo! and MSN are left in the dust, scrambling for ways to retain their share of this lucrative market. The search market is clearly owned by Google. The display advertising is still owned by Yahoo, but since Google just acquired DoubleClick, this could all change. What is more interesting is the rate of growth, jus amazing. A few years ago, Google was only earning couple of hundred million in net profit per quarter. To grow this fast in such a short time is just unheard of. We can’t recall any other company that has grown this quickly in recent years.
Despite the great growth from Google, it would be too early to say Google will eventually put Yahoo! out of business as some are saying. The online advertising market is still in the growth stage. There are still much more battles left to be fought before this war is over. We continue to believe Yahoo! is a good long term investment. Yes, the Q1 number was disappointing, but taking a long term view, we believed Yahoo! will return to its glory days. In the mean time, we continue to be amaze with Google. Buy GOOG whenever there is a weakness.
Here is the presentation from the conference call.
