Sure, you can read analysts' reports, examine P/E ratios, look at insider stock holdings, and listen to the CEO conference calls. But if you want to know how Google and eBay are really doing, you might just pop over to Fred Wilson's site. There you'll see that one of the companies is selling fraudulent crapola - and the other one is buying it!
To wit, here's the Google AdSense advertisement I saw on Fred's Weblog today - see if this one makes any sense at all:
Blog Rss
Great deals on Blog Rss Shop on eBay and Save!
www.eBay.com
If you hold stock in either of these rocket-fire Internet companies (and I do), this little ad on Fred's site has to make you very nervous. That's because Google's entire revenue stream (just about) comes from serving ads on other people's Websites that have some sort of context, and collecting money on a pay-per-click basis. And eBay relies on wired consumers continuing to make their marketplace (the largest unregulated marketplace in the United States) the place to go to sell junk someone doesn't want. Back in my business reporting days, this little item would be what I'd use to lead a critical analysis of their prospects. It's a mini-alarm bell that speaks volumes about the piss-poor defensibility each company has in their sectors - and the clear lack of hands-on human quality control.
Fred has, btw, done a terrific job (better than most of the trade press) of covering the poor value proposition that Google's automated AdSense offers to the market, as he experiments with it over the course of a year. I've also been trying it out, with very mixed results indeed. So if you click on this ad and send Google its 20 cents (while costing eBay it's four nickels) what do you get? "0 items found for blog rss." What a shock.
UPDATE: Turns out that crappy "contextual" ads may actually make sense for both Google and eBay - but for how long, I wonder? Anyway, to my eye, Tony Gentile has an excellent rebuttal to my post that analyzes the current numbers and what they mean - good blog as well.
