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November 21, 2006
Google vs. Microsoft Market Cap Game
Interesting seeing how Google's market capitalization has chased Microsoft's since Google's IPO. We have seemingly plateaued at a little under 60% for a year now, but any takers on bets with respect to how long that holds?
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"Until Google generates the type of cash that is created by Microsoft today, it's hard to think that its market capitalization will increase beyond the plateau that you mention."
I have one thing to say about this previous comment: Famous last words.
Some stocks are driven by the "greater fool" theory, some by technicals and some by fundamentals. Generally, if you wait long enough all stocks become valued by fundamentals but many trading fortunes have been lost prematurely predicting those transitions (I am reminded of IOMega of years ago).
Until Google generates the type of cash that is created by Microsoft today, it's hard to think that its market capitalization will increase beyond the plateau that you mention.
Cheers.