.floatimg-left-hort { float:left; } .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 12px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 12px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 12px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} Dear Mr. Berko:

Dear G.L.:

I think the Google Inc. (GOOG-$568) folks are suffering from a disease called multigenic bloviasis, or an acute case of social hubris. Jumpin’ Jehosephat, who do these Googs think they are that they would deign to dictate censorship policy to China? If the Googs wish to do business in China, they are obligated to obey and respect the laws of the host country.

The Googs have no more right to meddle in China’s social policies than Muslims in America have to insist that American women wear burqas.

Less than 2 percent of GOOG’s revenues derived from China, but the number could have grown hugely in a decade. This is a bad business decision that deprives shareholders of honest profits from the largest consumer market in the world. Shareholders should not allow GOOG to ignore its responsibilities to protect future value and earnings.

Yep! You’re right as rain, sunshine, green grass and blue skies. I was afraid of Google in 2005 when it was trading at $471 a share and earning $5.10 per share. I just couldn’t abide a price of 94 times earnings. I was and still am mindful of those flaky high-tech/dot-com issues with P/Es of 100 to 300 pushed by Merrill Lynch, Prudential, Morgan Stanley, etc., only a few years ago … and the ensuing slaughter.

But I goofed big time, because GOOG has zoomed to $630 in 2007; its P/E has imploded to 21; and earnings for 2010 have exploded to $27 per share. GOOG’s dominance in Internet search has given impetus to investments in new industries and additional advertising markets. I’m stone-ginger certain that profits from search advertising will generate enormous cash flow for years, but I’m as confident as gravity that Google will not repeat its current success in these new markets.

GOOG has the big bucks and the engineering mechanics to ensure that its engine remains the best. Its massive scale in queries (it has 70 percent of the market) provides the company with unparalleled data to determine which search results are most popular with users. This enormous data pool allows GOOG to continually tweak its algorithms and improve search results. GOOG’s search business represents 90 percent of net revenues.

Management has used this superfluity of cash to invest in new business lines such as YouTube, cell phones, third-party Web sites, Google Images, Books, Maps, Earth, Trends, New, Video Android, Chrome, ad nauseam. Though these efforts may enhance GOOG’s image, the niggardly revenues they earn are disproportionate to the enormous manpower they require.

Though Google still remains a powerhouse, investors may find that its upside momentum will wane and be imitative of the shares of Wal-Mart. As I said in 2005, I would not own the stock. But this should not preclude you from buying 25 shares just in case I goof twice.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net. © Copley News Service