Schadenfreude

At the end of Feburary 06, Forbes opined that,

Google is without doubt a stock market phenomenon. It has a market cap, as of writing, of $115 billion. This is equivalent to ten General Motors (nyse: GM – news – people ) or almost three McDonald’s (nyse: MCD – news – people ); or a job lot of eBay (nasdaq: EBAY – news – people ) plus Amazon (nasdaq: AMZN – news – people ) plus Electronic Arts (nasdaq: ERTS – news – people ) and, as a special offer to you, the whole of Sun Microsystems (nasdaq: SUNW – news – people )too. Google is worth more than Wells Fargo (nyse: WFC – news – people ), Coca-Cola (nyse: KO – news – people ), Shell Oil, Time Warner (nyse: TWX – news – people ), Verizon Communications (nyse: VZ – news – people ) and the German national telephone company. You could buy every major European and U.S. stock exchange for less than you can buy Google and still end up with change. Is this valuation supportable? The simple answer is no.

Forbes is a joy to read because it’s not only unabashedly pro-business, but it’s also very well written. Some folks would take a textbook to utter this simple truth:

While a company set to be the next big thing can dramatically throw out these kinds of metrics because of its spectacular potential, there comes a point where the law of scale kicks in and promise must turn into reality. The higher the hope value, the more urgent the need for a company to turn its sizzle into steak, because if at some point promise is not delivered, the hope value in the company’s stock price will dissipate.

I was pondering this while waiting for my gmail to come back…

Think about it.