Blockbuster is the latest analog player to suffer from a digital drubbing. Oddly enough, Blockbuster could have used 1 quarter’s worth of sales and bought Netflix long time ago, instead, like many companies that shall remain nameless in post, they went into denial mode. Look at the stock chart since Netflix went public:
Worst of all, look at the financial tables of the two firms:
This should not have even been close, but yet, Blockbuster lacked vision, and common sense. Mind you, it won’t be long before Netflix faces similar challenges by new players who go one step further…
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WatchMojo NewsletterLast year, I asked if Google would surpass MSFT by 2010, this year, with Google crossing $600 and $700 in a matter of weeks, Silicon Alley’s Henry Blodget and Tech Crunch’s Duncan Riley are getting in on the fun.
For the record, it is highly possible to think that Google will be worth a lot more than it’s worth today, but there’s also a lot to suggest that it won’t. When you break down the variables, it’s plausible to think that Google might be the world’s first trillion dollar company, too, but there is enough to suggest that that company will be based in China or India, and involved in wireless. Of course, these last three traits are right now very speculative, so Google is as good of a bet as any. But more on Google later, the thing that struck me most with Duncan Riley’s most, who is Australian, is that he asks: Imperium: Google’s March Towards Becoming America’s Biggest Company.
The key word, my friends, is America. Has America lost its edge? Probably. I am very sure that the world’s most valuable company in 10 years will not be an American one. The US currency is a shadow of its former self. Growth will come increasingly from Russia, China and India.
Back to Google, don’t get me wrong: Google has a lot of growth opportunities, and almost gets 50% of its revenues from abroad, but right now it only generates ads from search ads… once it begins to monetize YouTube, integrates Doubleclick etc., there is upside, but we should also put down the koolaid and realize that Microsoft remains a pretty good bet on that front: it will do nearly $60B in revenues, 5x what Google will do in 2007. Sure, MSFT is not growing anywhere near as fast as Google, but Google is a one trick pony whereas MSFT can more easily gain market share in Internet than Google can add market share (at least that’s the theory). The Web shall inherit the meek, I suspect that by 2021, web ads will be larger than TV ads… and guess who’s value will increase to reflect that?
While everyone is getting giddy in a remarkably 1999-esque fashion, I’d like to point your attention to the last Web-based company that had trillion dollar aspirations: Infospace, who’s Naveen Jain said “we’ll be a trillion dollar company.”
At one point, in 2000, Infospace’s market cap was $25B. Today, Infospace’s enterprise value is worth $425M.
Infospace was never a Google, mind you… but Google isn’t yet the America’s most valuable company yet, let alone a potential trillion dollar company either.
With China’s economy in a bubble-esque state of euphoria, I suspect that the market in China will face a correction in the hangover period after the Olympics… but after things settle down, expect one company to emerge from China to become the world’s most valuable company before long.
PLAY
