What's up with Google Inc. (NASDAQ: GOOG) or should I say down? It closed $20.47 down Monday, landing at $495.93, trading in a range we have not seen since last summer. Furthermore, it fell even further in after-hours trading.

In my many stories about Google I have often taken the position that it was overpriced, or at least priced more than I thought it was worth or would pay. When a former analyst now knucklehead predicted it would be $2,000 per share approaching a trillion dollar valuation you can just imagine my thoughts. But now I wonder if the pendulum has swung too far in the other direction.

Google may not have reported smash bang earnings but it did pretty well. I would think it did well enough to support a forward P/E ratio of 26. Of course, if one does not believe in those figures than perhaps we will see still further erosion of Google's valuation, but I have to think we will soon be approaching a real buying opportunity with such negativity smothering the stock.

I would watch this one closely for a discount buying opportunity. Even if Microsoft (NASDAQ: MSFT) is successful in acquiring Yahoo Inc. (NASDAQ: YHOO) for $44.6 billion, it does not mean doom for Google. Google is still producing a decent 25% profit margin, has cash in the bank and no debt. It also has a decent ROE of 22%.

Google has faults and Google has risk but it is still a substantial player in a very big, and expanding pond.

Sheldon Liber is the CEO of a small private investment company and the design and research principal for an architecture & planning firm. Disclosure: I do not own shares of GOOG, MSFT or YHOO.