On Friday my colleague Jonathan Berr posted Henry Blodget blasts Mary Meeker's Google (GOOG) math. In this story he outlined a slight difference of opinion. Actually a 1000%, regarding the potential revenue and earnings of YouTube. Since my own attempts at guessing what Google Inc. (NASDAQ: GOOG) is worth (Serious Money: What IS Google worth? One year later...) proved more accurate than either of them, and since total stock value is of more importance, I had to comment.

Here are some real important numbers: If Google earns $18 per share over the next twelve months, its forward P/E is around 28. If they continue to make any progress with YouTube revenue at somewhere in between our battling pundits and hold market share, Google might be worth $600 in 12 months. Not the stuff investors are dreaming of but pretty darn good.

If Google gains market share, adds any new revenue streams or improves its margins, it could reach 5% to10% above these figures. I do not believe this will happen because Google will not be able to achieve a return on investment for new business equal to that of its original idea. In addition, any new acquisitions, and there will be some, will not improve margins either.

To verify my track record, including bad calls, read Chasing Value and Serious Money.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

Sunday Funnies: Google (GOOG) now undervalued? originally appeared on BloggingStocks on Sun, 26 Aug 2007 19:40:00 EST. Please see our terms for use of feeds.