Re:Google Creates Alphabet, but Runs into BMW
by kuschku on Tuesday August 11, 2015 @05:00PM
(#10044346)
Advertising in general is a grossly overvalued business.
VW will still build cars, engines and small-scale power plants in a century.
Web advertising is already becoming an issue now, with more and more people moving to mobile, vendors pre-installing adblockers and even ad agencies starting to doubt the effectiveness of easily overlooked Google ads.
And still, VW, a single carmaker in a single company, is larger than the overvalued internet giant of Google that controls advertising in all but a handful of countries.
Google is a tiny player in the rest of the world economy.
Most recent quarterly numbers are more like Google has 1/3 of the revenue of VW but 85% of the profits.
> Google has a higher valuation due to an investment bubble, not due to actual economics.
Even if it was due to an investment bubble rather than, say, rational expectations of stronger long-term growth based on market characteristics, well, investment bubbles are as much "actual economics" as anything else.