Last Sunday I posted the funniest comment I received during the week that stimulated me to write: Pamela Anderson is a headline - not news - but SIRIus. This week I thought I would follow-up with another amusing story stimulated by a comment I received informing me that "Google earnings growth will most likely continue to run at 50%+ for the next few years." I had given Google Inc. (NASDAQ: GOOG) credit for a 50% increase in earnings this year trailing to 25% next, but I was corrected.
So what would 50% growth actually mean in real dollars and cents. By my definition I would categorize "few years as at least three or four. So lets run the numbers: Google closed Friday, February 2, 2007 with a capitalization of $134,305,000.
If you anticipate 50% growth this year (even from Google's current depressed level) you reach $201,457,500, my outside limit. A few years more after that means another 50% spurt brings you to $302,186,250 in 2008 followed by $453,279,370 in 2009 and $679,919,500 in 2010. For some perspective, ExxonMobil Corporation (NYSE: XOM) the largest company in the world by capitalization has reached approximately $440,000,000. I do not think we have to add the fourth year at 50% -- it's silly enough already!
Google has taken quite a hit this week, but if I used the valuation from the time of the comment it would have handily passed $700 billion. I just cannot envision Google as the largest company in the world, now or in a few years.
Check out my other posts for BloggingStocks here.
Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm.
The Richest Woman in the World: How Gina Rinehart Earns her Billions
America's 10 Highest-Paid CEOs of 2011 (and How They Earned It)

