360 Degrees of Google

Still, the temptation is to say, "Isn't this the same as Yahoo! buying Geocities, a totally overhyped company that Yahoo! could afford to pay too much for because who cared?"

No, because Geocities was "subtractive." This acquisition, I believe, will prove to be additive next year.

No one talked profits in 1999. It was all eyeballs and clickthroughs. Now everything is measured by CPMs (an estimate of the cost per thousand views of an ad), which is apples-to-apples to the rest of the media, and that means Google's got it made because it just bought itself some high-CPM copy to go around its burgeoning ad business.

Earlier in the day, Cramer wrote:

If I am right about Google (GOOG Quote), you might want to pick up some December $500 calls for $6-and-change today. I know, that's a wild one, but Google could become the de facto "only tech or media stock you need" between now and the end of the year, and it won't take much to have the stock trade to 41 times next year's $12 potential in earnings.

This stock is 40 points away from its all-time high, and there seems to be a real possibility that Google will take out that high in the coming weeks. If so, these December $500s at $6 could be a double.

Normally I like to recommend deep-in-the-money calls for what I like very much, and I am not changing my stripes. They are the best plays on GOOG. The December $400s at $40-and-change would be the best place to be.

But I believe that it could very well be right to have something up top, so to speak, for the breakout (if it comes), because that contract could turn into money without all that much of a move.

Remember, divide the stock price by 10 with Google to get it in perspective. Is it possible that a $43 stock could go to $50 in three months?

I sure as heck think so.

CBS owns CBS Radio, which broadcasts Real Money Radio With Jim Cramer, on select CBS owned and operated radio stations. At the time of publication, Cramer was long Yahoo! and News Corp.

---

Wait to Buy It Cheaper, by Dan Fitzpatrick

For any analysis of Google to be of value, it has to reference time frame. This anaconda has uptrends within downtrends that are within uptrends. I recently wrote about Google within a multimonth time frame. If you missed it, you might want to have a look because that thesis still stands.

However, let's look at Google within a short-term time frame -- a few days to a week or two. With earnings just a little more than a week away, the dynamics of this stock will change constantly.

This is a daily chart, but we can see that today's price action has been dominated by the sellers, and if it's true that mornings are dominated by retail activity and the afternoons are dominated by the institutional desks, then we've got to respect today's reversal. At midday, trading volume was already higher than the average daily volume. This sets Google up for a blow-off top, where the last gasp of buying occurs in response to positive news. And once all the demand for the stock at these high levels has been satisfied, sellers need to cut their price to sell their stock. Simply put, I think that's what's happening now -- the Greater Fool has already bought and is now a seller.