The Sunday New York Times (January 8, 2006) has an article by Andrew Ross Sorkin entitled "Is Google A Good Candidate For Rational Exuberance?" Some comments, but let me first add a few caveats: 1: I own Google stock and have mentioned this in previous posts; 2: I have known Safa since April of 1999 when he was a junior analyst at Piper on the Jupitermedia (then called internet.com) IPO; and 3: I do not know Andrew Ross Sorkin, but he did interview me twice in 2003 about our attempt at displacing Comdex with a trade show cdXpo; 4: I have no idea how much Google is worth or where the stock price is going and do not suggest that anybody should buy Google because of this post.

In the above mentioned article Sorkin mentions that Safa is obscure. Perhaps to Andrew he is obscure, but Safa has been the top analyst for Search stocks since 2001. He is probably one of the top two or three Internet stock analysts in the USA. Also Safa must be given credit for being the first analyst after the Spring 2000 Internet stock crash to realize that paid keyword listings was going to be the killer application of Internet advertising. While I do not have the exact date, I believe that in late 2001 Safa made a recommendation through Piper Jaffray that his followers purchaser GoTo at about $4.00 per share. GoTo.com became Overture which was then sold to Yahoo for close to $2 billion. I thought Safa was nuts at the time, but recent stock history shows that Safa was way ahead of his time and is to be commended on realizing the birth of a new wave of advertising that has swept the world.

Let's wait until December 2006 to see the outcome of Safa's estimate. Certainly by then we will know if Google's price is irrational or rational. In the meantime, it is clear that paid Search continues to drive Google. As it obtains more readers it adds more services. While not all of these services will be as successful as paid Search, they can possibly generate additional revenues at very little increased cost. They are services that require software development time, but for the most part, once launched, are frictionless ecommerce vehicles bringing high margin dollars into Google's treasury.