Wednesday, June 27, 2012

Weird’s Deep Thoughts (Heatstroke Edition): Google’s past is Facebook’s future

From TradingWithCody’s Cody Willard: Let’s talk Facebook again this morning and I’ve got some great historical perspective for you from another once much-maligned Internet IPO — Google.

I bought Google the day it came public and I held it for the next four years until I closed my hedge fund to become a news anchor on national TV. The stock popped 20% its first day and then languished and faded for a few weeks after as Wall Street tried to get its arms around Google’s business model. My analysis told me that Google was revolutionizing its industry — simple search — and was about to figure out new ways to use that Google platform to lock in users and create what I used to call “a burgeoning super-Internet called GoogleNet.” With Gmail and YouTube and all the other daily applications that hundreds of millions of people now use every day, having some understanding and vision of how networks scale and how platforms create their own eco-systems was frankly pretty darn prescient.

I remember a couple weeks after Google came public that Barron’s ran a cover article on how Google was doomed to fail and it quoted a couple analysts who said that they’d be interested in buying Google when it was at $20 a share. The stock was at $100 or so at the time. It never went below $100 again. Did you see all those comments from my blog and my friends telling me that they would be interested in buying Facebook at $5 a share? Hmm…

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