"In his report, Noto forecasts that Google's earnings per share will enjoy compound annual growth of about 25% from 2006 through 2009. The paid search market, says Noto, will grow 20% annually those years to amount to $19 billion worldwide in 2009. That growth reflects factors such as growth in the number of search queries, rates at which users click on advertisements, and the average price advertisers pay per click."
1. Even if the paid search market grows by 20% annually, which is very optimistic, it is absurd to say that the company whose market share is vast right now after getting a faster start than its competitors, will nevertheless grow FASTER than its competitors -- while not losing market share to Microsoft, Yahoo, or the dozens of other serious players that are just getting a seat on this gravy train. Totally unrealistic.
2. Yes, there will be more search queries. No this will not translate to a significant increase in profit. I just don't buy that.
3. Increased revenue per click? Are you kidding. You don't raise prices in a price war. That is the most ludicrous of all his tall tales. Please.
I just wish I had some shares to sell first thing in the morning. The bounce won't last until 10:00 at the rate the program selling of the execs kicks in at this wildly inflated prices. It's a crime that Goldman Sachs retail clients are being fed this crap. Scandalous.