Google Is Misunderstood… Or… Even Big Time Money Managers Have It Wrong

Posted: September 30, 2007 in Technology and Business
The wicked-smart tech money manager I spent time with at the investment conference last week nailed just about everything…
… except Google.
He said Google was the biggest train wreck in Silicon Valley.  That they were run by a couple of teenagers and were the most arrogant company in the world.
I asked him if he ever actually worked with Google?
He said no.
His attitude, though, echoes a popular sentiment… which to me means:  Google is just one big misunderstood company.
Now, I’m not ready to pull out the world’s smallest violin for them  quite yet… but being misunderstood has pro & cons for investors.
For example:
(1)  They don’t supply earnings guidance.  I’m not sure misunderstanding can get more dangerous than this for investors… as evidenced by the fact that GOOG’s only two earnings misses in the last few years were actually beats.  (Here and here.  Without these, GOOG would be assaulting $700.)
(2)  Google operates with the long term in mind.  Wall Street runs in the short term.
(3)  And now, everyone — even big time money managers — think Google is chaotic and about to collapse under its own disorganization.
Hardly.  They are a model for the future.
Want more evidence?  Here’s a clip from a Silicon Alley Insider piece on Yahoo:
GOOG has created what Yahoo, Microsoft, AOL, etc., can only dream about:  An environment with smart employees empowered to make important decisions quickly.
Maybe a little less efficient.  But a helluva lot more effective.  And that wins in the end.

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