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That is, until Barron's, the influential weekly financial newspaper,
featured Google this past weekend. There was nothing playful on their
cover, just the familiar Google logo being submerged into water, like
the Titanic. The article makes a compelling case that Google's success
is overvalued.
Among the issues discussed was a genuine peril unique to search based
advertising: click-fraud. Barron's wondered how anyone presently could
gauge the depth of this problem when;
a) this problem technically enriches Google, while robbing thousands of
their customers, and
b) it's almost impossible to distinguish how much is committed. If
Google knows, they're not saying.
So we see an incalculable problem within online advertising, the very
business that's finally measurable. Go figure.
But Barron's mentioned other problems that are vexing Google, as well.
The very guys on the cover of Time, Google co-founders Sergey Brin and
Larry Page along with CEO Eric Schmidt, are feverishly selling their
stakes in the company as is the rest of top management. While much of
these insider sales registered and scheduled for execution long ago -
what's truly disconcerting is that no insiders seem to be buying any
stock in their company.
It's a spooky one-way street.
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Even the puff piece in Time Magazine contained this loaded bon mot from
Schmidt, "The company isn't run for the long-term value of our
shareholders but for the long-term value of our end users." I had to
read the quote twice to make sure I had actually read it correctly and
then again to make sure I could figure out what he meant by "end
users".
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This isn't the next bubble burst, just a story of a company that did
its job so blindingly well that the public overvalued its stock. Now
it's time for its stock price to cool off. I'm happy to see the sector
grow more competitive. That's terrific. I think that everyone, even
Google's shareholders, view this as a healthy sign for the search
advertising industry, if not a certified validation.
About The Author
Joseph Pratt Media Analyst ICMediaDirect.com.
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Please explain what impact this will have on the SEO industry?
