'RealMoney' Radio Recap: Gaga Over Google

After Google's (GOOG) "magnificent" earnings report Thursday night, the stock traded to $346 Friday, within $4 of Jim Cramer's $350 price target. "It's good to be right," said Cramer.

Cramer told his "RealMoney" radio show listeners Friday that Google is benefiting from the "biggest and best secular growth story of the decade." The Internet and Google are both killing traditional forms of advertising, such as TV and newspapers because Internet advertising allows one to target customers and track whether people are actually viewing the ads, he said.

Cramer said he will not issue a new price target for Google because price targets are used mostly as attention-getters. And, as of Friday, Google has people's attention.

However, Cramer believes Google is headed higher, and he explained the logic of his former $350 price target. He said he used an EPS estimate of $7 for 2006 and applied a 50 multiple to arrive at $350. Now, that $7 EPS estimate for 2006 is below all the estimates on the Street, and a 50 multiple is conservative for a company with the kind of growth Google is demonstrating, he said. One could argue Google could make $10 in 2007, said Cramer.

"Forget about $350," he said. All you need to know is "Google is going higher. How much? I don't know. It's still a triple buy."

If you don't own Google and you feel like you missed the boat, said Cramer, "Please buy Yahoo!(YHOO)." Yahoo! also is benefiting from the same secular growth trends as Google. Although Yahoo! is not as good as Google, said Cramer, it's getting better, and it's a lot cheaper.

Stocks Under $10 co-author David Peltier joined Cramer to talk about Langer (GAIT), Microfield Group (MICG) and Ants Software (ANTS), three stocks brought up during Thursday's "Stump Cramer" segment in which listeners ask about obscure and low-priced stocks.