So whatever happened to Google $1,000?
After Google beat analysts estimates in its October 2007 quarter, CEO Eric Schmidt had this to say:
When we look at it, revenue growth of course very healthy, both in Google.com and also in our AdSense businesses. And the seasonal weakness in traffic was milder than we expected on Google.com, which was a very pleasant surprise from our perspective. It is obvious to us that the search quality investments that we are making are paying off, particularly internationally, as we do better and better in almost every country.
This was boilerplate CEO-speak coming from management. But that was enough to send the lemmings on Wall Street into an unprecedented frenzy. I don't know if some of these guys made a habit of sitting in front of their computers with a pound of weed and a bottle of tequila at the ready, but they soon let loose with a round of jaw-dropping stock price predictions. Here's a partial list of the revisions:
• Anthony Noto, Goldman Sachs: To $800 from $620
• Jeffrey Lindsay, Bernstein Research: To $720 from $625
• Jordan Rohan, RBC: To $725 from $690
• Mark Mahaney, Citigroup: To $775 from $600
• Heath Terry, Credit Suisse: To $800 from $600
• Jason Helfstein, CIBC: To $700 from $690
(The crazy thing is that three of the predictions actually materialized shortly thereafter. Shares of Google touched $741.13 on November 7, 2007.)
But Dinosaur Securities analyst David Garrity, deserves special mention with his $985 price target. Thinking of posterity, he was considerate enough to include the following, um, analysis to back up his prognostication:
To the extent that advertising media distribution channels are being transformed by emerging technologies with the possibility that mobile advertising may ultimately become more significant than the current broadcast channel in spending terms," he writes, "GOOG in effectively penetrating the walled garden that wireless communications services have been until now is securing a strategic technology provider role that will allow it to meaningfully shape the progression of development in the space."
Rereading that paragraph, I'm tempted to slam my head repeatedly against the wall until everything goes black. But let's wait because there's more. The hands-down winner in the Can You Top This? sweepstakes is none other than "Infectious Greed's" own Paul Kedrosky, who came up with a $1,000 price target on Google:
People are increasingly screwy about Google's (GOOG) near-$1,000 share price. The latest example: The hoo-ha over a Bernstein analyst upping his target on the stock from $720 to $850. Sure, $850 is a big number, but it's not that much of a deal to go from $720 to $850, an 18% increase on a stock that has run twice that much over the last few months. Further, GOOG had already pretty much hit the lower target, and, like the rest of the street, the Bernstein is essentially playing catchup....And me? I'm sticking to my $1,000 GOOG price target, posited months ago--to much scoffing--on one of my CNBC appearances.
So it is that Google closed at $318.78 Monday, slightly above its previous 52-week low of $309.44.
So it goes in the Age of Cramerica. Got a crystal ball and an itch to yammer in front of a television camera? Boy, do we have the job for you. Become a Google analyst! Unfortunately, the few folks with foresight, such as the brilliantly prescient Nouriel Roubini, got drowned out by the hucksters and perma-bulls. Didn't we see much the same thing, circa 1998 and 1999? Unfortunately, history does have a way of repeating itself.
Charles Cooper has covered technology and business for more than 25 years. Before joining CNET News, he worked at the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet. E-mail Charlie. 
There is still hope for the tech world. Reach into energy and manufacturing and you will see the answers. We would be glad to help Google out of their down turn. SolarTransfer is the solution.
>So it is that Google closed at $318.78 Monday, slightly above its previous 52-week high of $309.44.
from where I'm standing, the 52 week high is 724.80$. 309.44$ is the 52-week _low
_
All of the stocks right now have dropped to half the price, no matter what the company is, so the fact that google is 318$ right now doesn't say that everyone was wrong, since no one predicted the market crash.
No free lunch.
Six months ago, CBS (the company that you work for) was trading at $25 a share. I would never have predicted that it would lose almost two thirds of it's value by today (trading above $7). Did CBS or Google really lose that much value? Not really, but their respective stock value has for several reasons, one being that the value of the stock has become disassociated from the actual company.
For too long the web myths have been promoted as facts including the overarching superiority of open source and the wisdom of crowds. With the election of Obama and the appointment of people such as Eric Schmidt, if these are adopted it is likely we will be pushed further toward irrational policies with regards to intellectual property, notions such as 'scarcity is uninteresting' or that States such as California should receive disproportionate attention owing to the size of the market their when at the same time the Governor is seeking Federal bailouts.
If there is a historical indicator, it is that in times such as these insularity increases and the kubayah of the Obama campaign fails to produce workable consensus. Selfishness may not be virtuous but it is perrenial and exceedingly rational.
Hell... This doesn't even deserve to be on the highlight of any website.
Six months ago, CBS (the company that you work for) was trading at $25 a share. I would never have predicted that it would lose almost two thirds of it's value by today (trading above $7). Did CBS or Google really lose that much value? Not really, but their respective stock value has for several reasons, one being that the value of the stock has become disassociated from the actual company.
Mr. Cooper:
I loved the article you did on Google. Too bad it came a little too late. The cold irony of it all is that our guys were talking about Google last year (when it slammed through $700) -- pegging it for, at most, 200-300 value.The whole thing was so ridiculous - especially so when you really take a good look at their "revenue model." (Just do I don't get things mixed up, I'm not from a financial services firm, we're a small IT company in San Jose)
I usually don't write e-mails to journalists, but... writing as a citizen who works in the IT industry... with the whole economy turning sour and banks going belly up, it really begs the question, "Where is Sarbanes-Oxley?"
The word "billion" is the new "million" yet most Americans don't even have close to a million in their bank accounts. I think its ridiculous that the word "billion" is now so casually tossed around. It's a process of desensitization, really. A billion dollars is a LOT of money. When you really think about it when there's billions of dollars literally flowing here and there without any scrutiny or any audit trails, where is Sarbanes-Oxley? People literally have forgotten about Worldcom, Enron, Ebbers, Lay. Where is Bernie Ebbers? Financial firms must have done something illegal at some level, right? And.. no one is going to jail. How surprising.
Sarbanes-Oxley and the thousands of Sarbanes-Oxley compliance initiatives - initiatives that a lot of companies and state/federal governments are still paying for - were supposed to put an end to all corruption (or at least paper trail it so that executives, nay someone, could be held accountable). A story about that would be nice. How does IT at these financial institutions deal with SOX? Did they just not do it?
Someone, somewhere dropped the ball. Big firms usually meant big name players were probably doing their SOX compliance, their ERP - all those great department-wide information systems with their checks and balances. These great systems are supposed to prevent information (or lack thereof) meltdowns from happening (i.e. AIG, Washington Mutual). After the dust settles, the executives (hopefully) prosecuted and reprimanded, shouldn't IT have to take responsibility at some level, too?
Google was one of my favorite companies, but the whole experience has really tarnished by opinion of the company overall. Clusty, not Google, is now my homepage, I no longer spend my money with them and only use the search engine when necessary.
I'd like to thank you for this excellent article.
I'm a little bit upset reading some comments.
You did good pointing finger on market analysts who failed to predict correctly.
>All of the stocks right now have dropped to half the price, no matter what the company is, so the fact >that google is 318$ right now doesn't say that everyone was wrong, since no one predicted the market >crash.
What's wrong with you? Predictions were incorrect period! By the way market crash easier to predict than crash of single company.
>Stick to writing about technology because finance ain't your thing.
I wonder if the person who wrote this bought some google stocks :)
Cooper please keep going. More chance that I will follow your advice than advice from professional market predictor :)
>Hell... This doesn't even deserve to be on the highlight of any website.
Do you know how many people bought stocks because of market analysts?
Count first!
CNET should create and support the list of the "best" market analysts.
- by atici November 11, 2008 2:58 PM PST
- I think the best response to this article is the same as the one to the comments of Roubini:
- Like this Reply to this comment
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(23 Comments)Where is your own money? If you seriously believed what you say, why did you not invest so (say buy Google puts) and become a multimillionaire? Since you are not ultrarich already (by the way neither is Roubini), I imagine you weren't confident enough to bet your own money.
In the craptastic world of taboo democracy, everyone believes they have great ideas worth listening to, but only the real great people keep their mouth shut, bet with their own money and cash in.