The byline for the article was; “The business is a dynamo. The stock is a pipe dream, says Fortune’s Geoff Colvin”. These are big words, and in retrospect the wrong words. Read on…..

One of Colvin’s most interesting quotes, as far a I’m concerned is:

“Of course, any company’s wealth creation rises and falls with its stock price, which raises a huge question in evaluating Google’s achievement: Is today’s price sustainable? I must report that there’s just no way it is.”

The article above was dated July 24^th, 2007, and the today’s date is September 17^th, 2007. In the article Mr. Colvin suggested that Google’s stock price is indeed overpriced, at the same time he goes on to point out these stock facts:

“Google’s figure is $149 billion and rising fast, pushing the company past most of America’s biggest, most successful, most respected corporations. With Google (Charts, Fortune 500) at its recent record stock price of over $500, only three companies have created more wealth: General Electric (Charts, Fortune 500), Exxon Mobil (Charts, Fortune 500) and Microsoft (Charts, Fortune 500).

According to Yahoo! Finance Google’s stock price is presently at $525 per share, which is higher than the date of Colvin’s article. So where is the rapid correction in Google’s so-called inflated stock? I’ll tell you where…NO WHERE TO BE FOUND. Why you ask?

To fully understand the staying power of Google’s wealth and their business model, you need to be intimate with the bread and butter of their business. Paid Search Inclusion, or Adwords. I am intimate with Adwords and this is why I believe Colvin’s theory is way down the road.  

I live in a city that just hit it’s one million mark for population (Calgary, Alberta), and I’ve been doing business for some local companies, in which I use PPC advertising to promote their businesses. The level of competition I have from other companies in town is next to nothing. The simple fact is that only a scant number of companies (percentage wise) have been introduced to pay-per-click advertising via the Internet, and thousands of companies a month are rushing to their local SEO companies to sign-up for Adwords, and start spending mo-money.  

The saturation level that Colvin is suggesting for Google’s earning ceiling and inevitable decline in stock price makes sense for a bricks & mortar company, that requires great investment to increase their customer base. In the Internet world you grow a business at a breathtaking rate, and there is no need for a large investment.

I believe that Google’s stock is going hit a ceiling someday, but it won’t be anytime in the near future. Their growth is just beginning, as the percentage of companies still using standard advertising methods, and not Google PPC advertising is between 85–90%. Google Adwords is still a strange word to the overwhelming majority of businesses around the world. There is room for growth.

All the records of the past will one day be broken. Sports professionals break old records every year, and Google has already proved their model is one of the most powerful (if not THE most powerful) business model since the dawn of post industrial revolution business.

But then again…….what do I know? 

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All this, with the latest forcast for overall housing prices to drop in late 2007 across the United States. I suppose there are some areas where real estate is somewhat immune from fluctuation, and New York is one of those places. 

Some of the numbers below are not directly related to NYC real estate, but they either show the trend, or add a little humor into the fray. Interesting number on how much real estate work you can do when you’re serving 33 1/3 years in jail.

Enjoy! 

$7.25 million =

Going price for the most expensive of One Brooklyn Bridge Park’s 26 penthouse units, making it Brooklyn’s all-time priciest condo

$3.8 million =

The borough’s previous record, paid this past January for a penthouse in Williamsburg’s Aurora building

45 =

Stories slated for Donald Trump’s planned condo-hotel in SoHo

12 =

Months it took for The Donald’s controversial project to finally get approval

$1,550 =

Rent for a one-bedroom loft in Bushwick advertised – without apparent irony – as “punk rock heaven”

$1 =

Amount residents at the former punk squat C-Spot paid to purchase their East Village building five years ago

40,000 =

Square feet in Brownsville and East New York set aside by the city to be used as community farms

33 1/3 =

Minimum number of years drug dealer Alejandro Lopez-Guevara was sentenced to serve in prison following his 1988 conviction

$1.775 million =

Sum of the real-estate deals Lopez-Guevara has pulled off from behind bars

7 1/2 =

Percentage a rent-stabilized apartment could increase on a two-year lease

$1.2 billion =

Entire 2006 gross domestic product of Belize

$2.4 billion =

Value of residential listings held by Prudential Douglas Elliman, according to a survey by The Real Deal

$940 million =

Price that Urban American Management and the City Investment Fund paid for nearly 4,000 units in former Mitchell-Lama buildings in Harlem, making it the second-biggest real-estate deal in NYC history

34 =

Percentage of Mitchell-Lama’s original 105,000 apartments that were moved out of the program between 1990 and 2005

750 =

Number of calculators Halstead Property is donating to Harlem public schools

[Source NY Post] 

New York City real estate is a little on the expensive side, you might say. Therefore, real estate in New York NY, is prime for those desiring a solid financial investment.

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