It’s a good day to be Eric Schmidt: Google’s earnings once
again beat
expectations, and even beat expectations
that they would beat expectations, and the stock opened up $20 at $491 a
share. Then news came out that Goldman Sachs had upped its price target on GOOG
to $620.
Even with earnings of $3.18 per share per quarter, that’s still a p/e of 50,
give or take.
When your stock is that strong, cash is cheap. My colleague Russ Mitchell wonders
whether Google might have overpaid when it bid $3.1 billion for DoubleClick.
I daresay that if Google was any normal company, the answer would be yes. But
Google needs things to do with its cash, since returning it to shareholders
would barely have any effect on the stock price.
Snapping up DoubleClick mainly to keep it out of the hands of Microsoft might
be as good a use as any for the lakes of liquidity in Mountain View. Remember,
Google’s earning $1 billion a quarter these days. What else is it going to do
with the money?