16 ms·

Undoubtedly, people will soon scream 'Bubble!', but I believe this is part of the inevitable shift of technology becoming the driver of the world's economy.

• aggronn 13y ago
  I doubt this actually. Google is a much more visible part of everyone's daily life than Exxon. If Google were more valuable than the sum of the entire petroleum industry, then we would have a problem, but as it stands, demand for Google's goods and services is much more inelastic, and relatively more valuable, than Exxon's contributions alone. Then again, people will call anything a bubble. But its easy to see that this is not evidence of it by asking yourself if we'd be worse off if Google disappeared tomorrow vs if Exxon did.
• JumpCrisscross 13y ago
  Google's value vis-à-vis Exxon reflects Google having a lightly regulated de facto monopoly on search in most internet connected countries, while Exxon is in a fragmented, heavily regulated industry. Technology becoming the driver of the world economy would involve it (<10%) [1] passing industry (31%) [2] in its contribution to GDP. [1] http://www.econstats.com/wdi/wdiv_533.htm http://www.econstats.com/wdi/wdiv_533.htm [2] https://www.cia.gov/library/publications/the-world-factbook/fields/2012.html https://www.cia.gov/library/publications/the-world-factbook/...
  • baddox 13y ago
    > while Exxon is in a fragmented, heavily regulated industry You seem to imply the assumption that the regulations in the energy industry don't benefit ExxonMobil.
    • aray 13y ago
      If you have examples of that I'd be interested in hearing them. Otherwise the refutation is not really useful.
    • JumpCrisscross 13y ago
      Exxon has run, on average, an 8.6% margin over the last 4 years (FY 2010-2013) [1]. Google runs at double that. This implies (though does not prove) that Google has more leverage in its market than does Exxon. Do some government policies benefit Exxon? Likely. Does every government tax and regulate Exxon at the maximally efficient rate? No. But that is a far cry from saying Exxon would be worse off if, globally, resource-related regulation was pared back. [1] https://www.google.com/finance?q=NYSE%3AXOM&fstype=ii&ei=QDv1UtDQFMv2qQGvsQE https://www.google.com/finance?q=NYSE%3AXOM&fstype=ii&ei=QDv...
  • raldi 13y ago
    Wikipedia lists the characteristics of a monopoly here: http://en.wikipedia.org/wiki/Monopoly#Characteristics http://en.wikipedia.org/wiki/Monopoly#Characteristics Which of those characteristics do you see in Google?
    • JumpCrisscross 13y ago
      Single seller - Google commands 2/3 of search engine volume [1] and 1/3 of online advertising [2]. Yes, they have competition, but in several verticals they are the only practical choice. Note that this does not make them an abusive monopoly, which is what those characteristics seem to be describing more than a monopoly per se. [1] http://searchenginewatch.com/article/2289560/Googles-Search-Market-Share-Shoots-Back-to-67 http://searchenginewatch.com/article/2289560/Googles-Search-... [2] http://www.bloomberg.com/news/2013-06-13/google-is-projected-to-expand-lead-in-online-ad-market.html http://www.bloomberg.com/news/2013-06-13/google-is-projected...
      • raldi 13y ago
        In which verticals is Google the only practical choice?
        • ForHackernews 13y ago
          Search engine marketing, for one.
          • raldi 13y ago
            But not search, like the original comment claimed?
      • Pxtl 13y ago
        ... I'm actually surprised it's only 2/3. I mean, there are fringe geeks on DuckDuckGo, and IE Windows default search is Bing, but still I've never seen anybody IRL actually open anything but Google for a web search.
• cjensen 13y ago
  Every bubble comes with people who claim a technological shift or other fundamental shift has occurred. Instead, look at it analyitcally; A P/E of 30ish means that people think Google could grow 3X. Seems reasonable.
  • riggins 13y ago
    A P/E of 30ish means that people think Google could grow 3X. Seems reasonable. I'm on the fence. I think Google is doing amazing things and there is enormous potential. However, we're also talking about huge numbers. Annual revenue is already $60B. To go to $180B at the same margins they need huge successes. Like having self driving cars turn into a $60B/year business. Is that possible? Yes. But when you start to think about how huge the numbers are you see that its not easy. Its hard to escape the arithmetic of the law of large numbers.
• platonichvn 13y ago
  Software truly is eating the world and this is an example of that.