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Good News (3, Insightful)

gurutc (613652) | more than 8 years ago | (#14987032)

for Google's corporate image. I wonder when Google makes the Dow Jones? Seems like how Google's stock goes is a big indicator of how the market goes.

Re:Good News (1)

Registered Coward v2 (447531) | more than 8 years ago | (#14987103)

"for Google's corporate image. I wonder when Google makes the Dow Jones? Seems like how Google's stock goes is a big indicator of how the market goes."

No individual stock (or group for that matter) is a good indicator of how the market will perform. The best that can be said is the market generally outperforms bonds in the long run (as it should, based on the market's higher risk).

Re:Good News (2, Informative)

Anonymous Coward | more than 8 years ago | (#14987577)

For a company to be added to the dow it has to meet certain criteria
One of these is that the company has to be in existence for at least 25 years

http://otherthingsnow.blogspot.com/ [blogspot.com]

Re:Good News (1, Insightful)

HunterAmor (903799) | more than 8 years ago | (#14987106)

since it's not listed on the NYSE? never

Re:Good News (3, Informative)

nelsonal (549144) | more than 8 years ago | (#14987108)

MSFT and INTC are both in the Dow Jones Industrial Average even though they are not listed on the NYSE. The Dow isn't exactly your folks' Dow anymore. Ironically, they are both getting closer to being the dogs of the Dow, anyone want to give odds on when that happens?

Re:Good News (1)

tecie (834046) | more than 8 years ago | (#14987589)

The DOW isn't exactly a sound indicator of the US economy... if it ever was. The numbers are just that - numbers. The Dow can hit 10,000 or 2000, because what's being measured are those few indexed companies. The number is realitively meaningless except as an indicator of a major extremely short term trend. Personally (on the US stock markets) I'll follow the NASDAQ as the major stock exchange for indication of what the market as a whole is doing.

Re:Good News (1)

nelsonal (549144) | more than 8 years ago | (#14987786)

It's price weighted methodology makes it a pretty poor indicator of about everything. But it was what the NASDAQ was to the 1929 bubble and so it sort of held on. I'd guess that if you pulled the 30 biggest stocks from the S&P (from all sectors somewhat equally) and put some thought into the weighting methodology you could come up with an index of 30 stocks that would track most broad indicies pretty effectivly. (Almost all the broad index are weighted by market cap so the biggest members have substantially more pull than most would expect).

Re:Good News (0)

Anonymous Coward | more than 8 years ago | (#14987610)

MSFT and INTC are not the dogs of the dow.

The dogs of the dow refers to low p/e and high dividend stocks listed on the dow.

Re:Good News (1)

nelsonal (549144) | more than 8 years ago | (#14987758)

They aren't Dogs of the dow, you have to admit they are closer than they were when added (they are at positions 23 and 24 now both at about 2%) vs a very distant 29 and 30 when added (yield when added was 0.08% and 0.00%). You caught me though, I didn't look and was guessing that they were closer to 20 and 21 or so which would have been a pretty good increase in 5 years.

Re:Good News (1)

rollthelosindice (635783) | more than 8 years ago | (#14987728)

It will be a long time before google is on the Dow. If ever. They just don't move that quickly. Your examples are MSFT and INTC are two of the worlds largest companies and with solid profit and growth track records before they were added. There's a big jump between the S&P 500 and the Dow 40. And there is a long list of large companies that have been around a long time that aren't on the Dow. It also never overweights itself in any one sector, and between MSFT and INTC that's 1/20 of the index in high-tech. There's too many other sectors that need to be represented in the index. I just don't think Google will ever fit the bill for the big Dow 40. And if it is, it will be after about 8-10 more years of consistent earnings growth.

Re:Good News (0, Offtopic)

HunterAmor (903799) | more than 8 years ago | (#14987110)

nevermind. verify, THEN post. i stand corrected

Re:Good News (1)

bagsc (254194) | more than 8 years ago | (#14987278)

Just like MSFT and INTC? NASDAQ stocks in the DJIA.

Re:Good News (0)

Anonymous Coward | more than 8 years ago | (#14987151)

MOD PARENT DOWN!
Stop modding posts that "seem" insightful as insightful.
Do some research- look at google's ups and downs, and then look at the markets ups and downs. You will not see much of a direct correlation.
A rising (or lowering) tide lifts all boats in the water, yes, so with a bear market, google will also go up, in general.
I hate to say it, but sometimes computer guys talking about business is as funny as business guys talking about computers...

Re:Good News (1)

gurutc (613652) | more than 8 years ago | (#14987285)

Dude, Google sneezes and Wall Street catches a cold. AC of course.

Re:Good News (1)

heinousjay (683506) | more than 8 years ago | (#14987633)

Everyone falls prey to the same syndrome: "I can't do it, so it must be easy."

Ridiculous when you think about it, but I'd say about 95% of humanity is infected with this particular stupidity.

Re:Good News (4, Insightful)

stecoop (759508) | more than 8 years ago | (#14987357)

This might seem to be good news on the surface but let's look into the ramification of this. First would you buy any stock with a P/E > 50? I believe it is foolish and very risky to do so. Now the problem is that I own almost all of my investments in S/P 500. Hmmm - I will be indirectly buying this stock I don't want because it is a component of the 500; thus, to mirror the index my Mutual funds will have to start picking up Google. Crap, now I beleive the 500 is a slighlty higher risk investment now with Google then before without it and it dons't seem to follow my investment goals.

Re:Good News (1)

gurutc (613652) | more than 8 years ago | (#14987424)

I agree with you, what I meant was it's good news for Google, not for the S&P, since it gives Google a stamp of solidity.

Re:Good News (1, Interesting)

nelsonal (549144) | more than 8 years ago | (#14987494)

A couple of years ago, a stock whose business consisted of owning short term treasuries (silly but somewhat relavent) would have been priced at a 37% discount to their asset's market value at a 50 P/E. I think you'd agree that buying a treasury for 63 cents on the dollar represents a pretty good investment. Also, cyclical companies can see earnings swings of 300-400% from year to year, which can lead to cheap stocks with trailing P/E's that range all the way to infinity (no earnings last year--substantial earnings this year). While your rule is a pretty good one, there can be exceptions. It's generally unwise for value investors to follow any hard and fast multiple rules (aside from buy at a large discount to intrinsic value).

Re:Good News (1)

throwaway18 (521472) | more than 8 years ago | (#14987839)

I think you'd agree that buying a treasury for 63 cents on the dollar represents a pretty good investment

Actually I believe the peak oil theory. Combined with the inevitable long term consequences of the USA's national debt passing nine trillion dollars I think that any ten year investment denominated in US dollars is horrifyingly risky.
US treasury bonds are still massively overvalued at 63cents per dollar.

Re:Good News (1)

TMarvelous (928161) | more than 8 years ago | (#14987609)

And before this announcement you familiarized yourself with the other 499 S&P stocks? I bet you couldn't name 100.

Re:Good News (2, Interesting)

roach13 (940823) | more than 8 years ago | (#14987888)

While what you are saying is true on a basic level, the net impact on your funds is close to zero. The total risk/reward for any one stock, of the 500, when equally weighted, is insignificant. In fact, it may actually reduce risk by diversifying the S&P more. There are plenty of 'risky' stocks in the S&P 500, but it gains it's stability from having such a breadth of stocks that the maximum impact of one volatile stock is muted. If equally weighted, each company represents 0.2% of the portfolio. In other words, even if Google went bankrupt (anyone want to place bets on the odds of that happening?), the total impact on your portfolio would be a 0.2% drop. Now, if Google DID go bankrupt, the impact on the S&P would be much more severe, but that's more due to the related companies and the negative impact a major bankruptcy like that would have on the economy as a whole, and investor attitudes in particular. I for one welcome it - it's about time, their market capitalization, revenues, and balance sheet have placed them in the top 500 companies in the US pretty much since they went public.

Re:Good News (1)

Peldor (639336) | more than 8 years ago | (#14987604)

I wonder when Google makes the Dow Jones? Seems like how Google's stock goes is a big indicator of how the market goes.

So the Dow Jones is up a couple hundred percent over the last couple years, but off 25 or 30% since Jan? I must have missed that story in the WSJ. You'd think they'd mention something like that.

The Dow vs GOOG [yahoo.com] Doesn't look particularly similar to me.

Re:Good News (1)

bookemdano63 (261600) | more than 8 years ago | (#14987934)

"Indicator of the market"?

Google went up 550% in 15 months and then down 28% in the next 3 months.
During these times the S&P went up 18% and .5% and the DJIA went up 9% and 2%.

I think Google is way to volatile to add to any market average.

Follow it all (3, Funny)

JustOK (667959) | more than 8 years ago | (#14987033)

follow it all on http://finance.google.com/ [google.com]

Re:Follow it all (1)

bjpirt (251795) | more than 8 years ago | (#14987164)

good point. Just how unbiased are google (or Yahoo! for that matter) when reporting stories related to their own stocks?

Is there any regulation?

Re:Follow it all (1)

Headcase88 (828620) | more than 8 years ago | (#14987336)

They really have nothing to gain from lying about the value of their own stocks. Such a thing would inevitably be revealed with disasterous results. But you're right, it's good not to be 100% trusting in things like this.

Re:Follow it all (1)

j-pimp (177072) | more than 8 years ago | (#14987342)

good point. Just how unbiased are google (or Yahoo! for that matter) when reporting stories related to their own stocks? Is there any regulation?

Considering that most(all?) news stories on finance sites are from news feeds like PR newswire and Associated Press the question to ask is what stories don't they report.

Re:Follow it all (0)

Anonymous Coward | more than 8 years ago | (#14987249)

*cough*whore*cough*

Google embodies the S&P (5, Funny)

BadAnalogyGuy (945258) | more than 8 years ago | (#14987036)

They are the Standard. And lately their search results have been quite Poor.

I am interested in how they are going to expand with their main sources of income (U.S. and U.K.) pretty much saturated and their other international sources stagnant and losing to entrenched local search engines.

One Way They May Expand (1)

gurutc (613652) | more than 8 years ago | (#14987049)

Is through Net Users' adoption of Firefox since the default startup page is Google.

Re:One Way They May Expand (0)

Anonymous Coward | more than 8 years ago | (#14987261)

In that relationship, I choose to believe that it's Firefox that needs Google, not the other way 'round.

If you aren't using google already, there's not much chance you'll be using firefox.

Re:One Way They May Expand (1)

bheer (633842) | more than 8 years ago | (#14987648)

> Is through Net Users' adoption of Firefox since the default startup page is Google.

Only in the English and European builds, IIRC. Firefox uses Yahoo as the default startup page in China/Japan/Korea.

Reference: http://www.webpronews.com/topnews/topnews/wpn-60-2 0051201YahooFirefoxPartnerInAsianMarket.html [webpronews.com]

Re:One Way They May Expand (1)

MacJedi (173) | more than 8 years ago | (#14987790)

Firefox uses Yahoo as the default startup page in China/Japan/Korea.

For the moment...

Re:Google embodies the S&P (1)

solarbob (959948) | more than 8 years ago | (#14987063)

Thats what accountants and marketing people are for rather than us techies. I'm sure they will come up with something new that will once again raise the bar

How about this? (1)

h0nk3y (933455) | more than 8 years ago | (#14987408)

pages.google.com [google.com] tens of thousands of googlites with adwords on their home page?

I missed the fucking first post! (-1, Troll)

Anonymous Coward | more than 8 years ago | (#14987037)

Your comment violated the "postercomment" compression filter. Try less whitespace and/or less repetition. Comment aborted.

FUCK YOU NIGGER.

More info (3, Informative)

DavidHOzAu (925585) | more than 8 years ago | (#14987062)

From Bloomberg [bloomberg.com]

It's 1999 all over again (5, Interesting)

hadj (926126) | more than 8 years ago | (#14987064)

People have been saying this and I will say it again: these are signs of a new internet bubble. People (tend to?) forget. Lessons are learned the hard way.
Although Google's image and bank deposit have become big, be aware their revenues are almost 100% dependent of advertisement revenues. This is a market which can turn upside down in a second.

Re:It's 1999 all over again (2, Interesting)

way2trivial (601132) | more than 8 years ago | (#14987091)

indeed, their 10-K filing says in 2003 advertising sales made 97% of their revenue, and 99% in the years since..

I don't disagree that the advertising market is volatile, and what has been wrought, can be undone--
But I don't think in that market, a new evoloution (as theirs) can be done without some advance notice..
i.e. I think the signs of impending DOOM would be far clearer than anything visible right now, there is nothing on the horizion
and there is little chance for an upstart to topple google, in a very 'instantaneous' amount of time...

I believe the adage is, as long as a business has been open, is as long as it can expect to stay open?

Re:It's 1999 all over again (5, Interesting)

Bemmu (42122) | more than 8 years ago | (#14987130)

And there are some interesting contenders out there. Google tends to forget that there are people living outside the US, UK and China. I'm sure they are getting there, but while they linger there are others moving into attack positions. The local ones mentioned before are eating away their user share, since they can take into account location & language specific things that Google may be ignoring while pursuing it's grand world domination plan. In some languages a simple word by word matching scheme may not be enough and conjugation needs to be considered as well. Google has also upset some folks with the China censorship thingy and wanting to move all the users' data on their centralized servers, in general displaying the sort of arrogant behavior that slowly makes people want to see them fail.

Perhaps the most interesting engine to flock to would be http://www.majestic12.co.uk/ [majestic12.co.uk] , a seti@home style distributed indexing system. Sure they're not to Google's index size yet, but they are getting there, faster and faster... and the fairness of their ranking algorithms are open to view and discuss -- perhaps with time such closed algorithms could be viewed with as much dislike as Microsoft's closed OS sources. I wonder if Stallman is using it.

I am not a Google hater myself, personally I feel their search engine is adequate for my needs and their goal of organizing the world's information a very appealing one (although so broad that they might as well have said "we'll do what we please"). All I am saying is that it would not be unthinkable that the public opinion might slowly change, not favorably for them.

Re:It's 1999 all over again (5, Interesting)

randomjohndoe (618905) | more than 8 years ago | (#14987534)

>Perhaps the most interesting engine to flock to would be http://www.majestic12.co.uk/ [majestic12.co.uk] , a seti@home style distributed indexing system.

Now that is an interesting concept. Indexing the web would seem to be the kind of parallel operation ideally suited for distributed computing. You'd still need a central server to search the index and provide results quickly. (Okay, I decided to RTFL rather than just speculate, and I see that's what they're doing.) My initial assessment is that this is the most credible medium term threat to Google I've seen.

>...the fairness of their ranking algorithms are open to view and discuss -- perhaps with time such closed algorithms could be viewed with as much dislike as Microsoft's closed OS sources

Another excellent point. I wish I still had mod points. The closed nature of Google's ranking algorithms has disgruntled some folks, and an open system could become popular. Robert Cringely did a series on the mysterious workings of the AdWords algorithm, and whether Google is using the algorithms to "unfair" advantage. "Unfair" being quoted because even if they are doing it, it is not illegal, and perhaps not even unethical. But they could be deceiving or "gouging" (another loaded term) their advertisers, and it could be seen as counter to "Don't be evil". Cringely includes Google responses.

The point is, the advantages of open algorithms are pretty obvious.

http://www.pbs.org/cringely/pulpit/pulpit20050922. html [pbs.org]
http://www.pbs.org/cringely/pulpit/pulpit20051006. html [pbs.org]
http://www.pbs.org/cringely/pulpit/pulpit20051013. html [pbs.org]

Re:It's 1999 all over again (1)

Phoe6 (705194) | more than 8 years ago | (#14987722)

>>I wonder if Stallman is using it. No, he does not. I asked him once!

Re:It's 1999 all over again (1)

LordSnooty (853791) | more than 8 years ago | (#14987137)

I wonder that since they have such a huge number of businesses signed to the various ad products, and that those businesses are of many different types, big and small, and the cost to those businesses is fairly cheap, are they really in danger of falling to a downturn? They are not like the banner ad pushers of the late 90s, whose clients were generally big business. And I wonder how many of those businesses popping up next to Google search results rely heavily on being listed prominently on Google. They simply cannot afford NOT to pull Google ads. Otherwise their site disappears into the myriad of standard results.

Re:It's 1999 all over again (5, Funny)

grahamlee (522375) | more than 8 years ago | (#14987148)

Specifically, it's Bubble 2.0 (which is AJAX-enabled and speaks XML-RPC and SOAP)

Re:It's 1999 all over again (1)

Vo0k (760020) | more than 8 years ago | (#14987377)

Especially SOAP.

Re:It's 1999 all over again (0, Offtopic)

Pope (17780) | more than 8 years ago | (#14987459)

Snakes On A Plane? http://imdb.com/title/tt0417148/ [imdb.com]

Re:It's 1999 all over again (5, Informative)

TheBogie (941620) | more than 8 years ago | (#14987203)

This is not exactly like 1999, in that Google actually makes money.

Their gross profit last quarter was $372,208,000 http://finance.yahoo.com/q/is?s=GOOG [yahoo.com] .

In 1999 almost all of the internet companies had yet to have their first profitable quarter.

Re:It's 1999 all over again (1)

nelsonal (549144) | more than 8 years ago | (#14987504)

Ebay, Yahoo, Cisco and other massivly overvalued stocks were all making pretty good money in 1999. The problem was investors were looking at their businesses and apparently expecting trees to grow to the sky or something.

Re:It's 1999 all over again (2, Insightful)

qray (805206) | more than 8 years ago | (#14987235)

It's a different bubble, though. It's more of an advertising bubble not a tech bubble.

Has anyone really measured the value of a Google add? Are they effective? Maybe it's already been done. Just from my own experience I rarely notice the adds. So if the advertisers would suddenly decide such adds aren't that valuable and stop advertising you'd see Google either change create more intrusive adds or they're going to have to find a completely different source of income.
--
Q

Re:It's 1999 all over again (1)

Jaysyn (203771) | more than 8 years ago | (#14987369)

Charging for Gmail, maybe?

Jaysyn

Re:It's 1999 all over again (2, Interesting)

bay43270 (267213) | more than 8 years ago | (#14987398)

Are you asking how effective the ads are in terms of 'clicks per page impression'. That won't matter because advertisers only pay for the clicks. How well the clicks translate into sales can many times be measured directly by the advertiser (assuming the sales are online). So advertisers have a very good idea of how much these ads are worth to them, which is part of the appeal of this kind of advertising.

The real threat to google's advertising model is click fraud (and the fact that advertising revenues can't possibly grow fast enough to catch up to the companies market cap).

Re:It's 1999 all over again (1)

qray (805206) | more than 8 years ago | (#14987961)

That won't matter because advertisers only pay for the clicks.

I wasn't sure if they were paying for placement like in newspapers and magazines or paying on clicks.

So then it does look more like a classic type bubble where demand for the stock has put the market cap way above company value. Any little blip is likely to scare the herd and cause a stampede away from it. Much like we saw a while back.

In the end does the stock price really matter to Google?
--
Q

Re:It's 1999 all over again (2, Informative)

Anonymous Coward | more than 8 years ago | (#14987247)

It's particularly weird given that Burlington Resources is a reasonably successful oil and gas company, and oil and gas isn't exactly a market in economic downturn at the moment (or probably in the next decade or two).

Ah, wait, now I understand. Burlington Resources isn't really delisted, it was subsumed into Conoco-Phillips when they were bought out for $35.6 billion USD.

Now it makes more sense: Google is filling an empty slot in the S&P500, though the rationale for replacing a resource company with a computer-based service company is somewhat debatable.

Re:It's 1999 all over again (3, Insightful)

Luscious868 (679143) | more than 8 years ago | (#14987262)

This is a market which can turn upside down in a second.

I would take it a step further. I would say it's a market that can, and will, turn upside down at some point. Google keeps expanding and, IMHO, keeps taking their eye off the prize. I'm increasingly having to go deeper and deeper into the search results to find the information I'm looking for and that doesn't bode well. That's exactly why I started using Google in the first place, to find what I was looking for and find it quickly. If some other search engine comes along that does it better, I'll switch in a heartbeat and I know I'm not alone. If I was, Google wouldn't be nearly as popular as it is now because almost every Windows user would stick with the MSN search that IE defaults to. I would argue that people don't use Google because it's Google, people use Google because it works. They are a website, not an OS, and unlike Microsoft people can and will change if somebody comes along that does it better.

Re:It's 1999 all over again (1)

Overzeetop (214511) | more than 8 years ago | (#14987335)

Your search woes are because unscrupulous website makers are working as hard as they can to skew their website rankings. When Google was now, they didn't have to worry about people working the system because Google wan't big enough to care about. Anybody who puts out a search engine based on all new criteria (that works, of course) will have a temporary grace period where their searches will be more pristine. Then the ad hogs and meta pages will move in and shit all over that search engines results, too.

Google isn't getting worse because the engine is flawed, it just gets harder to keep up with the assholes.

Re:It's 1999 all over again (1)

ArsenneLupin (766289) | more than 8 years ago | (#14988013)

Google isn't getting worse because the engine is flawed, it just gets harder to keep up with the assholes.

Yes, last time I was looking for websites about the proper care and feeding of goates and sheep, guess what turned up in the 30 first pages?

Re:It's 1999 all over again (2, Insightful)

bagsc (254194) | more than 8 years ago | (#14987303)

The difference is that today, Google is a household name internationally, that has billions in profits. Slightly different than investing in Dr. Koop.com.

Re:It's 1999 all over again (1)

nelsonal (549144) | more than 8 years ago | (#14987543)

I wonder if investors lost more on the stable and surviving Cisco, Suns and Intels of the market (Cisco's peak market cap was $575 billion) or the Pets.com, DrKoop.com and other bankrupts (DrKoop's peak market cap was 1.3 billion). There were lots more of the latter and they are worth nothing now, but is it better to have a huge pie decline 80% or a smaller pie decline 100%.

Re:It's 1999 all over again...NOT (1)

Temujin_12 (832986) | more than 8 years ago | (#14987469)

This is not another internet bubble. The reason the internet bubble occurred last time was that you had biased stock analysts promoting junk stocks for technology companies with the following:

1- NO pattern of stable growth (since many were just barely founded)
2- NO solid business plan (most of these company's business plans were just "Go public... get rich")
3- 400%+ growth in the first day (after which nearly all of their venture capitalists bailed and sold)
4- Gross over-confidence in the internet (the "just build a webpage and get rich" mentality)

Google has shown a strong stable pattern of growth, they have a prooven business plan, their VC's have not all bailed at the first sign of growth, and they understand the dynamics of the internet (better than most of us do). I'm not saying that Google is immortal (no company is), I'm just saying that we have generally learned from the .COM bust of the last decade and that Google (so far) is not repeating the pattern.

S&P 500 emphasisizes bubble stocks (1)

peter303 (12292) | more than 8 years ago | (#14987523)

Because the index is weighted by total stock valuation, the bubble stocks are over represented compared to a equal weight index like the DJIA. In the late 1990s almost a third of S&P 500 was tech-related. Some people have estimated the S&P 500 is currently over 20% real-estated-related due to the housing price bubble.

Is this really a good thing? (4, Insightful)

the_humeister (922869) | more than 8 years ago | (#14987126)

The P/E and forward P/E of the S&P has been getting higher and higher every decade. This won't help. Sure they have to replace Burlington resources with something, but Google? Well, I guess they offset GM for the short term at least.

Re:Is this really a good thing? (1)

TheBogie (941620) | more than 8 years ago | (#14987237)

P/E is not a good indicator for growth stocks. Some people think it is not a good indicator at all. I think the increase in the P/E in the S&P is just a result of more growth stocks (like Google) being added to the S&P. It is not indicative of the next "bubble".

Take Google vs. GM for instance. Google's P/E is 68.09, GM doesn't even have a P/E (no earnings). Which stock would you rather own? Which stock does P/E point to as the better investment? It seems to me P/E isn't very helpful.

Re:Is this really a good thing? (1)

mix_master_mike (540678) | more than 8 years ago | (#14987383)

Offset GM? GM is a Dow component, not S&P.

Re:Is this really a good thing? (1)

nelsonal (549144) | more than 8 years ago | (#14987548)

GM is one of the 500 members of the S&P 500 (as are all of the 30 Dow components, AFAIK).

Re:Is this really a good thing? (1)

tekunokurato (531385) | more than 8 years ago | (#14987491)

And so has the growth rate in earnings. Do the math--it's not hard to see why the P/E would rise.

S&P? (1, Informative)

Anonymous Coward | more than 8 years ago | (#14987143)

For us the Europeans who only care about EEUU only when EEUU means a new Natalie Portman film, coca cola (fuck you pepsi) or the pr0n industry, what is S&P?

Re:S&P? (1)

p51d007 (656414) | more than 8 years ago | (#14987168)

Standard & Poors = S&P

Re:S&P? (3, Interesting)

silverbax (452214) | more than 8 years ago | (#14987230)

Standard & Poors 500 - a group of stocks that are chosen to represent the movement of the overall market. It's a better indicator than the Dow Jones index, which is only about 30 stocks.

As for Google joining the S&P, it doesn't mean anything other than a momentary blip on the stock price. It's an inflated stock which doesn't pay a dividend and is traded far over it's revenue. Personally, I wouldn't touch the stock, especially because not only is it overvalued, but the company could very easily be displaced by another company who comes along and does a better job. It's not like a group of college kids can get together and form a competitor to Exxon or Coca Cola, but they sure could threaten Google. It's just that the average, non-technical person wants to get on the next Big Thing Train and they've heard of Google, they probably use the search engine, so they buy the stock.

Big Deal (-1, Flamebait)

jtwJGuevara (749094) | more than 8 years ago | (#14987189)

A) Being added to the S&P doesn't affect me as a practitioner of IT
B) Their stock price is inflated beyond belief and worth only as much as someone will pay me. Google isn't paying a dividend and never will. You're better off trading baseball cards than Google stock.

Re:Big Deal (2, Informative)

Threni (635302) | more than 8 years ago | (#14987217)

> Being added to the S&P doesn't affect me as a practitioner of IT

To be fair, you probably weren't in the article submitters or the editors minds when they decided to run this story here. Some of us buy/sell shares. Being added to an index is generally good for a company because it will automaticallly be added to any index-tracker that uses that index.

> Their stock price is inflated beyond belief and worth only as much as someone
> will pay me.

Every product, service and share price is only worth what others will pay for it.

Re:Big Deal (1)

bill_mcgonigle (4333) | more than 8 years ago | (#14987715)

Also good for us lazy investors who just buy SPYder [sharebuilder.com] shares.

Re:Big Deal (1)

jtwJGuevara (749094) | more than 8 years ago | (#14987869)

Every product, service and share price is only worth what others will pay for it.

Negative. Do you receive dividends [wikipedia.org] from owning your stocks? If so then you must realize that owning your stock means more than just being able to sell it to the next schmoe willing to speculate later.

Re:Big Deal (1, Insightful)

raoul666 (870362) | more than 8 years ago | (#14987284)

Their stock price is inflated beyond belief and worth only as much as someone will pay me.

Kind of like...oh, anything else that you own or produce?

Dividends (2, Insightful)

everphilski (877346) | more than 8 years ago | (#14987595)

he's talking about dividends [fairmark.com] . Since Google is pretty hardcore about never splitting stock, you will never get any dividends by purchasing Google stock. Investing in prettymuch any other company (besides Berkshire Hathaway and a few other notable exceptions) you will have a shot at getting dividends on a semi-regular basis. That's free stocks, which translates into free money on top of the increased valuation of your stocks over time ...

The problem here is although they are trying to model after Berkshire Hathaway, look at this 6-month trend: http://finance.yahoo.com/q/bc?s=GOOG&t=6m&l=on&z=m &q=l&c=%5EGSPC,%5EIXIC,%5EDJI [yahoo.com] : the results are suprising: they are only keeping up with the market. After we get over the first year of hype they are really doing no better than the aggregates. That's pretty sad. Now granted there is some volatility in there from the DOJ and the china stuff, they may rebound, but really they should be doing better. Maybe if they had stuck with the basics...

Re:Dividends (1)

jtwJGuevara (749094) | more than 8 years ago | (#14987834)

Good to see my comment on dividends wasn't completely lost. If I had mod points, you'd be receiving them. While that's a suprising bit of information given the love affair with Google's stock, a 6-month trend hardly ever tells the whole story of a company's stock price. Over 6 months, the price has only kept up with indexes, but over the past year it has trampled them. But what's going to be even more important is the trend over the next five years. Personally, it's entirely too unpredictable of a stock and is extremely risky given its absurd valuation and no prospect of ever offering a dividend for owning a share of the company.

Re:Dividends (2, Informative)

Rude Turnip (49495) | more than 8 years ago | (#14987856)

"That's free stocks, which translates into free money on top of the increased valuation of your stocks over time ... "

Ah-HA! So you're the guy my old finance professor used to make fun of. When a stock splits, you don't get anything for free. The company is still worth whatever it's worth, it's just that now the stocks on a per share basis are worth half as much because you have twice as many shares. When I examine companies, I don't even bother with per share statistics, I look at the aggregate numbers only.

On the topic of dividends, whenever a company pays dividends, that equates to less money that can be invested back into growing the company. Unless you take your dividend checks and invest it in more stock of the same or similar companies, your total rate of return will be lower.

Google is built on a foundation of sand right now (4, Insightful)

MikeRT (947531) | more than 8 years ago | (#14987218)

Right now Google is built on an advertising model. They are just one decline in online advertising away from having everything fall out from under them. If they are going to stay a serious contender, they need to take the corporate search market very, very seriously and make it a key component of their product offerings.

For all that can be said about them, Microsoft at least sells products as the foundation of their business. As long as people need a good (yes, XP is good for many users, this coming from a Mac fan) OS for their cheap PCs or an office suite, Microsoft has a strong position. Google, not so much. They may have the best search product, but they are dependent on online advertising, which can decline even if their engine reachs near sentient comprehension of what you really want to know.

Re:Google is built on a foundation of sand right n (1)

kevin_conaway (585204) | more than 8 years ago | (#14987256)

Corporate Search [bearingpoint.com] you say?

They're positioning themselves.

The potential is huge... (1)

RoadWarriorX (522317) | more than 8 years ago | (#14987333)

Altough I would agree that Google's main source of revenue is advertising, it's not the end-all, be-all. Google potential is in information brokerage, and that is BIG. They will collect as much information as possible and still look good doing it. People would love to "be on Google", but subject to the terms of begin on a global directory. You think that when you click a link from Google that Google forgets that it happened? Don't bet your life. They are collecting information on what you search, what you click from their site, and probably be somewhat accurate on your online habits. That's the type of information that business and governments are interested in. In fact, why do you think Google did not give the U.S. D.O.J information on porn search habits? It really not because they are trying to be good, it's because they do not want to give the information for free. Plain and simple. The knowledge is power, and the power will generate revenue.

Re:Google is built on a foundation of sand right n (1)

the_humeister (922869) | more than 8 years ago | (#14987358)

You could say the same thing about television and radio.

Re:Google is built on a foundation of sand right n (1)

ObsessiveMathsFreak (773371) | more than 8 years ago | (#14987402)

You could say the same thing about television and radio.

At look where they are now. Declining ratings, falling revenues. If Google is superceeded by a better search offering, then their revenues could quickly take a tumble.

sigh (-1, Flamebait)

hakan2000 (945918) | more than 8 years ago | (#14987239)

... and why this is "news for nerds, stuff that matters" is beyond me. Slashdot, news for ners, stuff that matters AND Google Google Google

Google themselves wouldn't do that (1)

Britz (170620) | more than 8 years ago | (#14987286)

Reading what the heads of Google had to say about their stock (careful, careful, careful, our market is so competitive, we could loose to Yahoo or Microsoft any second) I suppose they themselves would not have included it.

Mixed feelings. (1)

Vo0k (760020) | more than 8 years ago | (#14987310)

Why do I have mixed feelings about it?
In one hand, our favourite just got a boost, recognition. In the other hand it just got a little bit more corporate, evil. A Jedi Knight who has just killed a powerful evil opponent who wasn't defending. A victory, yes, but corruption of the dark side grows. Will they be able to remain Good?

Re:Mixed feelings. (1)

Machina Fortuno (963320) | more than 8 years ago | (#14987545)

Well... is corporate america infecting then, or vice versa? I hope for vice versa... Hopefully Google's success can show some of those bastardized companies out there how to kick ass. I like Google honestly... between them and Wikipedia - yeah, I feel cool! Haha.

remember Google? (5, Funny)

i_am_the_r00t (762212) | more than 8 years ago | (#14987318)

the search engine with the tiny, sparse page?

now when I do a search What I get Sounds like a Starbucks drink.

Froogle-Local-Picasa-Blogger no whip, please.

Don't be evil.

So Who Got Bumped? (0)

theManInTheYellowHat (451261) | more than 8 years ago | (#14987399)

If there were 500 before and they added Google then some is not on the index anymore.

And if we are in a new Internet bubble are there any sidebets as to when Google comes off the S&P?

Re:So Who Got Bumped? (1, Funny)

Anonymous Coward | more than 8 years ago | (#14987436)

From the blurb:

"According to marketwatch.com, Google is being added to the S&P 500, replacing Burlington Resources Inc. While this has provided a short-term boost to the stock price, time will tell what the overall impact will be on this respected index and the institutions (i.e. mutual funds) that follow it."

Come now, even us ACs read the blurb before we make idiotic comments!

Re:So Who Got Bumped? (4, Informative)

macadamia_harold (947445) | more than 8 years ago | (#14987467)

Burlington Resources won't be listed anymore on the S&P 500 because they're being acquired by ConocoPhilips(also on the S&P500) [cnn.com] , so they're not really "leaving".

Re:So Who Got Bumped? (2, Funny)

Swanktastic (109747) | more than 8 years ago | (#14987475)

Wow. I've heard of not reading TFA, but who doesn't even bother to read the first sentence of the article summary?

Article head (2, Informative)

ebvwfbw (864834) | more than 8 years ago | (#14987670)

So Who Got Bumped?

...replacing Burlington Resources Inc.

It's reasonable for S&P (2, Interesting)

Vo0k (760020) | more than 8 years ago | (#14987456)

Like Google has mission of providing good search results, S&P is about providing reliable index value. Google is representative of the IT sector and there's not much about it being 'good', 'strong', 'reliable' or anything like this. Google will be the first to go down the drain if the bubble bursts and S&P know it well - and pretty much that's why they added Google. Because it will pretty well show when the bubble bursts, resulting in accurate indication of the state of the market by S&P. Google may not like Microsoft but when people type 'MS Windows' in Google, they expect to be sent to the proper Microsoft webpage, and that's why Google keeps Microsoft scored high for these keywords in their results. Brokers watching S&P expect to see it go down when the stock is about to down really deep, so a group of companies that will go down first are likely to be listed. Google rides the tide of the net, new technologies, new developments, the leading edge - so they pretty well predict which way the market is going, stagnant, losing, gaining - they are useful as the indicator. So rejoicing or grieving about them being added to S&P doesn't matter and won't help or disturb Google all that much. It will help S&P.

Re:It's reasonable for S&P (1)

flanman (2247) | more than 8 years ago | (#14987910)

Excellent point!

Remember how they added Nortel to the TSX (Toronto) exchange back in .com.

I ton of people lots their life savings when it went KABOOM!

I would avoid any fund that tracks an index with stocks in it that are not proven over the long (ie 10+ years)

Sure there are the GM's of the world, but they'll be over shadowed with stable stocks that will grow over the long term.

Let god forbid GOOG in DJIA. (3, Informative)

cpatil (955342) | more than 8 years ago | (#14987570)

Most of you here expect GOOG to enter DJIA. No not so soon. Any Dow component is a fully matured company, in other words their growth is limited to less than 9%. I really don't want GOOG to be one of those. Let it continue to grow at 40-50% a year :-)

Re:Let god forbid GOOG in DJIA. (1)

the_humeister (922869) | more than 8 years ago | (#14987750)

Eventually it will have to. A 40-50% growth is not sustainable unless we actually have a huge population boom.

This means zilch for the S&P500.... (1)

zymurgy_cat (627260) | more than 8 years ago | (#14987603)

...and it will still outperform 80-90% of money fund managers, year-in, year-out. There is nothing to see here, at least for the S&P500.

Time to sell my SPDR's (1)

dgb2n (85206) | more than 8 years ago | (#14987653)

Not sure what percentage of the S&P this will constitute but it will probably be too high for my tastes.

Don't think there's much upside left on GOOG.

Sell low, buy high? (4, Insightful)

jackjumper (307961) | more than 8 years ago | (#14987763)

According to this guy [ricedelman.com] , this is a big problem with the S&P 500 index funds. When a company gets added, it's riding high. The company that gets bumped is low. So if you follow the S&P, you're selling low and buying high.

Google doesn't entirely rely on Advertisements (0)

Anonymous Coward | more than 8 years ago | (#14987982)

Google does much business with their search appliances and outsourcing search technology. For example, a few U.S. government agencies paying big bucks to have Google appliances and custom search engines installed within their highly-sensitive intranet sites. After the installation of Google search technology within these intranets, customers were suplied with better search results, increasing productivity and other subjective user measures. Google's strength is in their search technology, and can market and deploy it, and thats one place they still have an edge over other search technology companies.
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