In four days, Google will release its much-anticipated Q4 results. I have no doubt many people within the high-tech world will take a deep breath breath just before 4 p.m. when the Q4 numbers will be unveiled. In my mind, the key question is whether Google results that fail to meet expectations and/or a disappointing forecast for 2006 would necessarily be a bad thing. Maybe it would be a positive development given the enthusiasm about Google and Web 2.0 is bordering on irrational exurberance. You have investors willing to pay a huge premium for Google shares, analysts postulating about the stock hitting $2000, and VCs pouring millions of dollars into start-ups with no business models other than maybe selling out to Google, Microsoft or Yahoo (Yahoo may be acquiring Digg.com for $35-million). Maybe what the high-tech world may need is some less-than-stellar Google results to give people a much-needed slap in the face. The conditions today are eerily similar to the dot-com boom, and I believe ripe for a crash. Henry Blodget has some intriguing thoughts about Google in an aptly-titled post: "Hey Google Gamblers! Belly Up to the Q4 Craps Table". While I wouldn't call Blodget a bear on Google, he's certainly pragmatic about its valuation and metrics at a time when most investors are throwing fundamentals to the wind. (I agree with a comment that Blodget is also being opportunistic because he'll look like a genius if Google shares tank.) There is simply too much riding on Google's continued financial and stock momentum so any disappointment next week will likely cause the market to go into a tailspin. But this, in fact, may be a good thing to recalibrate investor and analysts (other than Gomez & Co.'s Philip Remek), as well as Web 2.0 entrepreneurs looking for a buy-out rather than focusing on building a viable business.
Update: News.com has an interesting story looking at how Sergey Brin and Larry Page each sold $160-million of stock last month. As well, the company is apparently testing with the interface of its search engine page. Here a mock-up.
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Mark Evansthe blog - examines the world of telecom and technology from a distinctly Canadian perspective.the person - lives in Toronto, CA with his wife and three children, and works as director of community with PlanetEye Inc. 
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Can Google's Q4 Results Bring Sanity to Web 2.0?
by
Mark Evans
on Thu 26 Jan 2006 08:24 AM EST | Permanent Link
Comments
Re: Can Google's Q4 Results Bring Sanity to Web 2.0?
by
MarkFan
on Thu 26 Jan 2006 08:29 AM EST | Profile | Permanent Link
If people need a slap in the face, I hope you're the one doing the slapping, Mark. I'd love those manly hands having their way with my face.
Mark's the king! MarkFan Re: Re: Can Google's Q4 Results Bring Sanity to Web 2.0?
by
Mark Evans
on Thu 26 Jan 2006 08:44 AM EST | Profile | Permanent Link
er, i'm blushing...i think.
Re: Can Google's Q4 Results Bring Sanity to Web 2.0?
by
Sean
on Thu 26 Jan 2006 09:28 AM EST | Profile | Permanent Link
While Blodget has some good points regarding Google's valuation (of which the value investor in me agrees), isn't he essentially doing what he did with Amazon (if you ignore the behind the scenes trash talking). As you've noted previously, Mark, one of his principle objectives is to regain his credibility within the investment community and public at large. By going so vehemently against the grain, if Google's shares sink won't everyone be writing about how he was among the first to make the call? Mmm...wouldn't be a bad piece of PR.
Again, while I tend to agree with him about Google's soaring valuation, you have to wonder where his motivations lie. Out of interest, what other companies is he following? If he's a technology expert, why does it seem that Google his one-trick-pony? Side note: a quick scan of his blog shows little of real insight (to me at least), other than he is in favour of telco's toll demands and supports Google censorship on Chinese search results (but has little to say about the company's reluctance to provide the US government with search results to support the resurrection of the 1998 Child Online Protection Act). Re: Re: Can Google's Q4 Results Bring Sanity to Web 2.0?
by
Mark Evans
on Thu 26 Jan 2006 10:14 AM EST | Profile | Permanent Link
those are all good points. while i think blodget has some insight, he's also trying to rebuild him reputation/cache so i agree that he's being opportunistic by being a bear on google. if the stock tanks, he looks good and perhaps gains some of the respect he lost. i find it interesting that he's already being widely quoted again by the media, which seems to have forgotten this is a guy who was publicly touting dot-com stocks while privately saying they were a bunch of crap. it's hard to be totally believeable when you've got a track record like that.
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