Tuesday, January 29, 2013

Investing in Google

Google is a crazy company. I have written about it before.
Its M Cap is about USD 250 Bn
And its PAT for FY12, 11, 10, and 09 has been: USD 10.7, 9.7, 8.5 and 6.5 Bn respectively

So, one is paying a significant price for Google.

But here is why I believe Google is going to be a behemoth - its moat.

Give me USD 150 Bn and you cant create the Coca Cola Company.
Give me USD 250 Bn and you cant create Google. It's my belief of course.

The way Google approaches the domination of understanding every person who is on the internet is amazing.
Questions:
Can Google's search engine be overpowered by a competitor? It's a cash spewer.
Can the wealth of information of Youtube be recreated by a competitor?
Can Youtube's power of providing a global advertising opportunity be replicated?
Is it an organisation full of superbly motivated people?
Would any other company have the pockets or the audacity of trying to create Google Glasses, Google Maps, Google Cars (Self driving)?
There is something brilliant about Google - it has a very durable competitive advantage and its available all over the world (and may be Mars)

The moat keeps getting bigger with the Chrome browser and Google+ and Youtube and Glasses...

Then again, it's way outside my circle of competency.

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