Archive for May, 2004

Will Google’s corporate strategy hurt stock performance?

Saturday, May 1st, 2004

More on the Google IPO. Some investors are concerned about Google’s corporate policy.

As a small investor, I’m interested in this IPO which promises to be more accessible than others. I prefer the Google search engine and love Google Adsense (which you’ll see displyed on just about all my web sites). However, I am concerned about increasing competition (from Microsoft) and the viability of some aspects of keyword advertising.

Google promises not to worry about short term earnings while it concentrates on the long term. I prefer to invest long-term in most cases, so I can live with that. I do wonder how necessary the free washing machines for employees are and if profit decreases (due to competition, or less keyword advertising) I wonder if these things will continue even to the detriment of the com[any’s financials.

Also, with a couple of insiders holding all the voting power, there may not be enough accountability. Sure they say that they want to make the world a better place, but what if they change? What if they start awarding themselves crazy stock options? Investors only defense will be to sell.