Dueling Fools: Google Bull

Google (Nasdaq: GOOG  ) is an easy stock to defend. Sorry, Rick. I won't be rolling over and playing dead today.

You can't out-morph Google
This Fool has been on an extended journey into unorthodox investing theory for a while, and whether I'm reading up on risk-management strategies, evolutionary economics, or the business value of personal incentives, Google springs to mind as a shining example of a company doing everything right.

"But they make mistakes!" I hear you cry. Yes -- that's exactly the point.

Nobody, but nobody, is as willing to fail as Google. The scattershot approach of throwing one idea after another at the wall to see what sticks has turned up lots of dead-end efforts like Google Answers or the stillborn Google Finance site. In both cases, Yahoo! (Nasdaq: YHOO  ) has outdistanced Big G's projects easily.

But you only need a few success stories to balance out the cost of all the missteps. Take GMail, for example. In 2004, Yahoo! had more than 200 million users worldwide, many of whom had accounts with Yahoo! Mail; Google didn't even have an email service. But as of November 2007, Yahoo! was stuck at 250 million email users and hardly any growth, while GMail had around 90 million subscribers, a 53% leap year over year. Google Maps aims to do the same thing to Yahoo! Maps and MapQuest.

The best part of that? Google already knows how to turn page views into revenue. Its AdSense/AdWords marketing platform is second to none in that respect, despite the best-laid plans of Yahoo! and Microsoft (Nasdaq: MSFT  ) . Google can easily afford to take its time in letting new services grow into whatever size shoes they need to fill. The company makes money along the way, regardless.

No jealousy
Google isn't married to the Internet, either. I mean, sure, it's a very intimate relationship, but also an open one. Google is looking for more profit opportunities offline. It's reaching into radio advertising and print ads, eco-friendly fuels, a long-term plan to get behind TV ad contracts, and clearance to bid on fresh wireless spectrum licenses.

Got a phone handy? Call 1-800-GOOG-411 and get free directory assistance, while helping Google build a statistical model for better voice-to-text processing. Keyboards and mice will one day be obsolete, and Google wants to help you talk to all your gadgets.

There's no telling what Google will look like in 10 years, where its profits will come from, and what kind of markets and services the company will dominate. But the company is determined to evolve in whatever direction it takes, to make sure that it will dominate something and make lots of money. This amorphous puddle of innovative juice will flow into empty spaces we haven't even noticed yet, with cash flows following suit.

Foolish finale
I'll have to leave the numbers for my rebuttal. Just rest assured that Google's stock is worth every penny today, and it'll continue to inflate as long as information-based businesses remain uninvented. This is no easy-come-easy-go bottle rocket, or a pre-bubble Pets.com; instead, it might just be the second coming of Berkshire Hathaway. Hey, if you can build a global conglomerate out of a busted textile mill, why not start with a successful and profitable Internet search engine?

Further Foolishness:

You're not done with the Duel yet! Go back and read the other entries, share your opinion in CAPS, and vote for the winner.


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