Google Juggernaut Continues

Google reported Q2 earnings on Thursday night and guess what - the stock is down! It seems whatever sort of numbers GOOG reports the stock will take a tumble.

This time the bears seized the fact the earnings were slightly below analysts expectations and only represented a 28% year on year growth.

Never mind the facts that revenue grew at 58%, traffic to the high margin google.com sites was higher than expected and the management explained exactly why operating expenses were a bit higher than normal in Q2.

Actually despite all the hype, by the end of Friday GOOG was only down 5% - hardly tragic for a stock that had already made 20% in the last 3 months.

Google should still make $15 per share this year and at least $20 in 2008. A 2008 PE of 26 seems fairly cheap for a company that just grew revenue at 58%.

I am still holding out for $600 before I reduce my holding in GOOG. I seem to remember some analysts had that as a 2006 price target but multiple compression meant it did not happen.

I have a big exposure to Google and I like it that way. The company is monetising the continued growth of the Internet in a way few other companies seem able to do, eBay included.