28 March 2004
CBS News Sunday Morning put David Pogue on site at Google to tell the story of the company. Many things about the story entertained. It was reminiscent of the Silicon Valley of the late 1990’s. Tech companies in that era were hiring at will and creating great places to work. Fun, long hours, lottery-scale payoffs and popular culture were key elements of the work place.
CBS’s report mentioned some numbers that caught my attention. Google has sales of $1 billion primarily from advertising revenue. Google is expected to be valued at $20 billion when it goes public.
IBM is valued at around $158 billion. IBM has sales that exceed $89 billion a year. The company earns over $7 billion a year. The stock market puts a value on WalMart that exceeds $257 billion with $258 billion in sales and profit of almost $9 billion.
What makes Google worth twenty times sales? The answer lies in thought processes that are holdovers from the bubble.
Filed under: Investing