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

This entry was posted on Thursday, January 24th, 2008 at 10:22 pm and is filed under Google, Financial/Stock. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.