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November 22, 2006

Word of Mouth gone wrong?

Google just broke the $500 mark.  It's market cap exceeds 150 billion, that makes it the most valuable company in Silicon Valley, bigger than Yahoo, and Apple. Google has the 23rd largest market-capitalization in the world.  Google trades at 57X PROJECTED 2007 earnings.   This is expensive!

According to Standard & Poor analyst Scott Kessler people just don't care how expensive it is. "A lot of people feel not only that they will lose out, but they will feel and look stupid" 

My question, is this word of mouth gone wrong?  Can word of mouth go too far?  Can the need to go with the masses and not be percieved as wrong have a negative effect?  It looks, to me, like there is some tipping point here.  A place where the natural check and balance of word of mouth becomes lost in some emotional storm.  If so, what is it, how can you anticipate it and when is it negative as opposed to positive?

I don't know, the answer. 

What I do know is that Ididn't buy Google at $100 because I thought it was too expensive for another .com.  Clearly, I don't know anything. 

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