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November 23, 2005

GOOG has not outperformed, Wed., Nov. 23, 2005, 1:53 PM

On November 7, I submitted my first article to TraderDaily.com, as a new columnist. In it, I took exception to Cramer's hyping Google at the same time he was putting the knock on EBAY. He said EBAY was dead as a doornail, and that it should be sold.

So I simply said, ok I'll buy the EBAY and sell you the GOOG. Quite a number of traders saw that.

Today many of them are marvelling at the $423 price tag on Google. But, let's see what has happened from the time I filed that article. GOOG is in black; EBAY is in blue.

You see, my EBAY would be at about $445, not $423, priced comparatively to GOOG.

Yes, I do agree that GOOG has been a great stock. I have also pointed out some of the reasons why I think that is. Moreover I have pointed out the risks.

In terms of info tech companies, I happen to believe that EBAY and Yahoo have the better management and a better business model. Long-term, and not just a couple week's trade like this, I feel GOOG will run into a wall in the marketplace, but EBAY and Yahoo will act like the Energizer Bunny.

When ads were repeated on television, in the early days of television, we all watched. When Google introduced AdSense, many of us clicked.

As the years went by for television, most of us clicked off those ads.

In time, we will mostly ignore the ads on AdSense too. After all, how many times can we be interested in a sales pitch. You see something; you show some interest. But later on, what's there to sustain your interest in an ad? They are just trying to sell you something.

At least with EBAY you get to sell something of your own. And, with Yahoo, you have the Web's best information portal.

Maybe if Google offered something like Google Finance to compete with Yahoo, I might change my mind. But other than keyword search, which Yahoo and others have too, what really of significant value does Google offer?

Sure, Google is great today, but info tech is changing at lightning speed, and traders of GOOG are in at a 100 PE, which is a very long-term commitment.

Posted by Posted by Bill Cara on November 23, 2005 01:53:18 PM | Category: 45 Info Technology