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Friday, October 31, 2003
Incomparables
Welcome to the bizarro-world of business reporting. I have no doubt that valuations being bandied about for Google's much-too-eagerly-anticipated IPO sound rich. But comparing the company with Verity is just whacked.
They both have some pretty good search technology. Both do serve the enterprise. But Google's revenues are coming from a massive global user base (an audience). More specifically, the lion's share of those revenues come from advertising, NOT corporate IT contracts.
Open Text is like Verity. Autonomy is like Verity. Google is more like Yahoo... or maybe it's just in a class by itself. It goes without saying that (if you conveniently forget that they remain takeover targets for behemoths like News Corp. and Disney) companies like Yahoo are overvalued right now. Valuations are also rich on Open Text, Autonomy, and Verity -- especially Autonomy -- so what? Eventually this silly mini-bubble will correct itself, possibly when "Crazy Al" Greenspan comes to his senses and raises rates.
Meanwhile, rumors are flying that Microsoft approached Google, possibly even to discuss a merger. I guess there's a story behind every story. Sometimes, "unreal" valuations are all too real.
Posted by
Andrew Goodman
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D'oh!
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