Friday, February 02, 2007

Google YouTube deal very interesting angle from Admin

It is very interesting angle on YouTube deal, from the press we can think that for Sergey's native country it could be normal conduct of business. Let us hope for Google's shareholders sake that he was grown up in America.
I think that Google is very close to Reckoning Day and smell of cooking oil is all over their financials with tax rate of 13% in Q4, only to "beat" the street.
When you would think about possible scam opportunities with prosecutor's approach (in style of ENRON Smartest guys in the room)in all business arrangements here you will find that it is really very creative set up: nobody really knows where from the money are coming, you have financial incentive to allow click fraud in order to bring more revenue, you have partner networks where you are paying money - who organize all these "partner" networks. Is it a-la-Fastow style or really independent entities, you can easily "smooth" the earnings with management of this relations and ability to play with SBC and Tax rate is really amazing. I do hope that it is impossible after Enron and scandal of these magnitude is not needed in order to bring this valuation closer to reality.
The truth is that Daily Reach has saturated and going down while MSN's is up and Yahoo's is flat, margins are declining, growth is slowing and expenses are rising, they even had to trim CAPEX in Q4 in order not to kill Free Cash Flow below 2005, it is flat and market cap to FCF ratio is at 95(!) compare to yahoo's 28.

1 comment:

Anonymous said...

I was going to comment earnestly but noticed you had comment moderation enabled so decided to withhold my real comment and post this nuisance message instead. Enjoy the inconvenience.