How quickly could Google stock crash?

Google shares have crossed the $600 mark. It is now officially more valuable than FedEx, MacDonalds, Coke, Intel, IBM and Wal-Mart, and analysts have predicted it could reach a share price of $700 next year. Whilst the chances are that the analysts' 'predictions' will help the Google share price to reach $700 next year, personally I would sell at $699 and never look back. Google is, to misuse the phrase: oversexed, overpaid and over here.

Oversexed. Google has had excessive amounts of good will from web users of the years, and this cannot continue. Whilst the good will was initially based on the quality of its search results and its 'do no evil' philosophy, the search engine results which once stood out are now little better than those of other search engines, and its 'do no evil' philosophy fails to stand up to scrutiny. Its continued support relies as much on its being perceived as the good-guy in relation to Microsoft's bad-guy rather than any reality, and as it becomes as big as Microsoft it will be increasingly find a less forgiving audience.

Overpaid. There is little doubt that Google has a massive online presence with its fingers in a million different pies, however most important to Google are its search engine and the Google Ads. Whilst the search engine provides an outlet for the Google Ads, its domination also provides the strong brand image that encourages people to use the ads that are then embedded in so many other web pages. However web users are a fickle bunch, and use of a service today does not necessarily mean that the service will be used tomorrow. The rise of sites like Facebook shows how quickly new companies can become major players, and just around the corner may be an idea that totally changes how we use the web, and the advertisers will want their ads on that site, not on Google.

Over here. As well as paying for the current Google company, people are paying for a organisation that they hope will keep growing. However the European and North American markets that Google has such a strong foothold in will soon stop growing; all those who will get the Internet will have the Internet. Attempts to enter the emerging markets in the far east are fraught with dangers as it has to compromise with more restrictive governments at the expense of its image in the west.

The Google share price is based on a myth, that the web will continue to be used in the way it is today, and if there are changes Google will be at the front. However, changes are likely to come from outside Google, and if the competitor holds its nerve and doesn't sell then the Google share prices start will start falling, and then they will fall hard.

People are paying for the Google myth and if it shows any weakness there is not a lot left.