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Feeling lucky with Google?
Stock Spotlight: The stock has more than doubled since the IPO. Is it still a buy?
November 29, 2004: 12:29 PM EST
By Paul R. La Monica, CNN/Money senior writer

NEW YORK (CNN/Money) - It's safe to say that Google has lived up to all the hype. So far, at least.

Since its mid-August initial public offering, shares of the top search engine company have shot up nearly 110 percent, bringing back memories of the tech stock euphoria of the late 1990's.

But there's a big difference between Googlemania and the last dot.com stock craze.

In October, Google (Research) posted blowout third quarter sales and earnings numbers in its first report as a publicly traded company.

Google clearly is not a fluffy fly-by-night Net company with little more than an idea and a URL; there is a sound business.

And that business -- selling ads linked to specific keyword searches -- is going gangbusters. Analysts expect Google's sales to increase by more than 50 percent in 2005.

What's more, search advertising is highly profitable. Google generated healthy operating margins of 26 percent in the third quarter, excluding a one-time charge from a legal settlement.

Yet, shares of Google have dipped from their highs recently after the company warned in a regulatory filing that revenue growth in the fourth quarter might not be as robust as what some of the more optimistic analysts had been expecting. Concerns about insider selling have weighed on the stock as well.

So now that Google's stock is trading at about 12 percent off its 52-week high, should investors expect a comeback in the near future? Find out in our Stock Spotlight »  Top of page




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