Google - Can the Growth Really Continue?

As a business, Google has proven to be a sort of a media and economic darling. Taking a simple premise - offering searching of Internet sites for free, while deriving income from the sales of web site advertising, as well as selling the results themselves - and turning it into a multi-billion dollar conglomerate with many facets of business is never easy in today's economy. The members of the corporate board of this company are also mathematical nerds of sorts - their latest stock offering was for 14,159,267 shares of stock (the first 8 decimal places of Pi) to raise $2,718,281,828 (the number of the constant e in calculus), and have proven to be wily for analysts to predict.

With all of these mind games, Google seems to be immune to the harsh reality and the major ideal of the markets in regards to the type of Internet Advertising based company that Google has ammassed. How long, however, can Google avoid the seemingly inevitable fall for businesses of its type?

Looking at the figures, Google's share price has increased from the IPO price of approximately $80 per share to, for a time, breaching the $300 a share mark - reminiscent of the great Internet market bubble of the late 1990's. While there has been a move by the company since it's Initial Public Offering to diversify its holdings and reach into more markets through acquisitions, it has seen little shift of revenues, in terms of percentages, from the core business. Given what we knowof the late 1990's, investors are not going to stick with this company that long when this stretch of unreasonable profits and revenues slips, due to a slow quarter in advertising, down the road - more likely in the short term, even likelier in the moderate term (maybe the next 6 quarters or so).

The fate awaiting Google seems to be destiny, given that companies such as Lycos, Altavista, and Yahoo - all three major search engine operators in the late 1990's - all reached unreasonable levels of revenues, but were snakebit by a slowdown in revenues and immediately suffered a loss of 20% or more in share prices as a result.

I believe, in summary, that Google is trying to squeeze its core business for proceeds via these weird IPO's and other stock sales, while the company is still marketable and in the good graces of the business media. But, I forsee this business model being weaker a year from now, and that Google soon won't be selling Pi shares of stock for e dollars.