I think they will, and maybe soon. Salesforce’s valuation has been really high in recent history. Even after losing half it’s value, it’s P/E is still 135. That’s high. But it’s a great growth story, and owning Salesforce would solidify Google’s position as the big dog in SAAS.

There’s no doubt the match-up makes sense. Salesforce’s CRM solutions would go well with Google’s Enterprise Apps. With the market this bad, CRM will probably go even lower. Eventually Google will be tempted to use some of that $13 billion it has sitting around, and Salesforce would be a great acquisition.

Speculation about Cuil.com is rampant. Is it a true Google Killer? Is their format superior? My only burning question is why they picked such a shitty name. If you haven’t heard, it’s pronounced “cool”. That made me dislike it from the start for some reason. “Cool” can never become a verb like Google. Google is quirky-sounding, fun, geeky. Cuil makes me want to gag. It just looks like it should be pronounced with an annoying accent, “kewl”, “cuuiill”.

Call me a Google fanboy, but I really think Cuil made a big mistake by choosing such an annoying name. I know that choosing a company name and getting the corresponding domain isn’t easy. But “cool”? Come on.

GOOG’s sell-off today seems unwarranted. The stock’s currently under $527 after hours. If anything, their position has been strengthened by the MicroHOO debacle. Growth is still strong like bull, especially internationally. Youtube and G’s Enterprise Apps are still in their infancy, tons of potential. Yet the stock is down 4% amid a huge tech sell-off.

So I put my modest monetary resources where my mouth is today. Bought a few more shares of Google at $529 towards the end of the day. It’s just too cheap. Their estimated P/E for 2009 is just 21. Even if earnings dissapoint a bit, the PEG (price/earnings to growth) will probably still be ridiculously low. A PEG ratio of 1 is considered reasonable, while 2 would indicate a very lofty valuation. Apple’s PEG ratio, for example, is currently 1.43. They command a premium because their earnings growth is excellent. Google is growing like crazy too (and arguably more sustainably). But their PEG ratio is only .97.

On top of all that, I think Google can beat their long-term expectations. Major Adwords innovations like Conversion Optimizer, Website Optimizer, Doubleclick integration, and other improvements will eventually have a major impact on earnings. Plus, unlike Yahoo & Microsoft, Google is focusing on long-term advertiser satisfaction. They’ve shown that they’re willing to sacrifice short-term earnings to provide greater value to their clients. That’s just one example of steps Google is taking to ensure advertisers are happy.

Anyways, I think Google’s a good bet to ride out these horrific financial times.

IACI (Interactive Corp), Ask’s parent company, is currently valued at around $5.5 billion. IAC owns bunch of solid companies - Ticketmaster, HSN, Lending Tree, the list goes on. They’re going to spin off all those companies in the near future, leaving Ask.com as the “core” of IAC, along with some other web properties like Collegehumor.com.

What will IACI be valued at it’s just Ask.com? Who knows? Could be $2 or 3 billion. Google should scoop them up for that price. If Youtube was worth $2.6 billion, Ask is damn sure worth that much or more.

Adding another 4.5% U.S. search market share would be a big boost to G’s bottom line. Ask is currently running itself into the ground. The ads are out of control. 8 ads on top of real results? Are they serious? Their users are going to start leaving in droves.

I guess the main roadblock would probably be anti-trust. It would reduce competition a bit, but Ask already uses Google to provide the vast majority of their ads. And they’re currently ruining the business anyways.

Ask.com has a different audience than Google. So they should keep the unique interface, maybe improve the relevancy a bit. Let it operate semi-independently from the rest of G.

90% of my time lately has been spent on PPC and Google Analytics. So I’ve discovered some useful blogs and thought I should spread the word:

Top PPC Blogs
Jeff Hudson’s PPC Book - Funny writing, good insight
Gordon Choi’s PPC Blog - Solid advice
Clix marketing blog - another good’un
PPC Hero - More basic, but good

Analytics Blogs:
ROI Revolution - Great tips and tricks for Google Analytics users
Avinash Kaushik’s blog - the grandmaster of analytics
Lunametrics - Robbin Steif & Co’s blog, focus on GA.
EpikOne - Justin Cutroni shows advanced GA tricks

Any that I missed?

For the Adwords content network, too many keywords can be a very bad thing. My early and unsuccessful content groups had as many relevant keywords as I could cram in there. Why not? It’s not always worth it to set up a separate ad group for closely-related kws. And it seemed like more keywords = more impressions = more clicks.

Well, Google’s content network algo doesn’t think so. The official Adwords blog puts it this way:

For contextual targeting, we look for pages that match most of the keywords in your ad group. For example, if your ad group has a number of keywords about lilies and tulips, we try to find pages about these two topics together. If you have an ad group with diverse keywords on different themes, it may decrease the number of pages on which your ad is likely to appear.

Takeaways:

1. Always separate content and search campaigns
2. Make sure content campaigns are tightly themed and grouped

The benefits of Microsoft buying Yahoo sound good in theory - reduced costs, bigger advertiser base, etc. But this deal isn’t likely to be good for Microsoft’s shareholders (stock dropped 6% today). It’s more likely to benefit Google.

I’m still confident that Google’s going to wipe the floor with Microsoft/Yahoo. And the beatdown they’re gonna put on Microhoo will probably be worse than the one they would have put on Yahoo alone.

Here’s why:

#1 - Microsoft’s web properties consistently lose money, even though they’ve been the default homepage for millions of people for 10+ years! That’s a ridiculously large advantage which they squandered. Last year their online division lost $890 million on $3 billion revenue. Doesn’t seem like they have a knack for managing portals.

#2 - Painful Merge - Merging YSM & Microsoft Adcenter will be an expensive PITA. It’s going to suck for employees and advertisers. Expect all improvements, upgrades, and development to cease or slow to a crawl while this clumsy newborn beast called Microhoo stumbles around, bleeding money all over the place.

What will Google be doing during this time, you ask? They’ll be extending their large lead in search and working hard on other areas, like Apps and Youtube.

#3 - Adcenter’s Track Record - It’s doubtful that Microsoft can manage a search business effectively. Their decisions with Adcenter don’t exactly inspire confidence. In fact, some of them seem designed to intentionally piss off users. Check out webmasterworld’s Adcenter forum for plenty of examples.

#4 - Microsoft’s fat pockets - The exciting environment that fueled innovation in Google & others just doesn’t seem to exist in Microsoft’s search division. There’s no real motivation to innovate when you don’t have to worry about breaking even. Big daddy MS is there to pay the bills.

Despite all of this, it could still be a good move for Microsoft. It’s their only chance, a hail-mary attempt at being a big player in search. If they happen to get this thing right and execute perfectly, everyone will applaud the brilliant move. I think the opposite is much more likely.

I don’t think Google is facing a serious threat as lots of people said today. It’s a sign of desperation that Yahoo’s getting acquired at a price that equates to a P/E of 60.

Brian Caulfield of Forbes sums it up in his article Yahoo Doesn’t Have What Microsoft Needs:

Call it reverse synergy–both Microsoft and Yahoo! are weak where Google is strong, in search and search advertising.

Related:

A Messy Marriage - critical article about the buyout from Forbes

Disclosure: I own a few measly shares of Google.

Everybody knows Google and Microsoft are at war. Microsoft wants to be a big player in search, and Google is making progress with their productivity-software offering. They’re both investing billions. Seems like a good match-up at first glance.

But the odds are heavily stacked in Google’s favor. The only reason Microsoft has a decent share of the search market is that IE has defaulted to msn.com for years. There’s no incentive for people to actively switch to MSN’s search engine. They’re probably 5 years behind Google in search. From what I’ve seen, they don’t have the leadership or the corporate culture to build an engine that rivals G’s. The brightest minds want to work at Google, not Microsoft.

Ask.com or some unknown startup probably has a better chance of overtaking the lead in search than MSN does. Microsoft is so desperate, they’ve created elaborate schemes to artificially inflate their search query counts, more info here.

Google, on the other hand, is giving away their Docs suite free. That’s a big incentive to switch. Even so, I doubt Docs’ growth will be explosive. Most people won’t switch from MS Office until they buy a new computer and realize they don’t really need to pay for it this time. Or when it comes time to upgrade. But a lot of them will switch, like I did recently after buying a PC. Office costs $139-$500, depending on options & add-ons. Both suites offer online collaboration. I haven’t tried Microsoft’s Office Live, but have used Google Docs’ online capabilities for the last 6 months. It’s easy to share docs/spreadsheets with friends, store them online securely, etc.

In summary, Google is going to royally kick Microsoft’s ass in this match. They’ll continue to dominate search and slowly gain market share in the productivity software market.

GOOG is looking cheap at these levels, closed at $574 today. That’s down from a high of $747 last year. No big earnings disappointments, no revenue shortfalls, nada. Just a crazy market. Forward P/E is only 27! WTF? Yahoo’s forward P/E is like 40, and their growth sucks balls. I don’t get it at all.

Wireless has such huge potential for Google, I don’t think most people realize. If Google manages to nab some of that tasty wireless spectrum in the upcoming auction, they’d be in a position to have a G-Network, not just a measly Gphone. Wireless broadband is the future of communications, and the C and D blocks up for sale are the best of the best. They’re known as beach-front property in the wireless world, and their may never be a sale like this again. The spectrum for sale in blocks C & D has the farthest reach, and penetrates thick walls - so it’s ideal for almost any kind of nationwide wireless networking.

If I understand it correctly, G has lots of options if they nab some choice spectrum. They could set up their own network. Or they could simply act as the landlord, and rent space out to other companies. This way they could have a measure of control over the whole industry, and make sure that the big players don’t cut them out of wireless ad revenue. Nobody knows exactly what they’d do with this prize, but be sure that there are a bunch of genius-level PHDs working on some crazy shit right now.

AT&T just posted quarterly profits of $3.6 billion. Wireless is the most profitable sector of their business by far, and accounted for 1/3rd of their total revenue ($11.6 billion).

Google has over $13 Billion cash in the bank, so they can shove around even the biggest telcos. AT&T and Verizon both has less than $3 billion in cash. Unlike big telcos, Google doesn’t have to shell out billions of dollars a year in dividends. They’re a growth company gambling their cash on crazy ideas. Ideas which could pay off exponentially one day.

Tomorrow I’m gonna sell some boring mutual funds from my IRA to make room for more GOOG.

Edit: Found a good article explaining the wireless spectrum, looks even more promising after reading this:

Wireless Spectrum Explained

Google’s rising stock price is seriously beefing up the holdings of Google.org. During Google’s IPO, one percent (3 million shares) were set aside for the organization’s charitable arm. That’s worth over $2 billion based on Google stock price today. They also donated $90 million in cash to kick things off.

On top of that, they’re giving one percent of each year’s profit to the foundation. Google’s gross profit for the last 4 quarters was $6.3 billion. That’s another $63 million to .org. With GOOG’s impressive growth in profitability, this number will balloon further over time.

So how much have they donated so far? Not much, according to this page. Looks like around $15 million or so thus far.

G.org is unique as far as charitable organizations go, it’s classified as for-profit. That means it can be taxed, but also means they can lobby in ways that non-profits cannot. It also allows them to invest in beneficial commercial ventures.