Google's Now Only as Pretty as the Rest

They can't figure out what to pay for it. They don't know if it should be 30 or 40 times estimates. But they know they can't pay what they wanted to for it Wednesday, because it didn't beat the estimates enough.

There, that's the real backstory on GoogleGOOG. To me, you can't pay 30 times earnings for the possibility that a company you thought was going to earn $17 is now going to earn $18. That's just not enough. It's just too got too much growth.

But it is possible to see why you would want to take 40 times off the table, given that some of the "beat" was with a lowered tax rate and the revenue didn't explode as much as you would have liked. (I get the 40 times as top limit because that is twice its growth rate.)

So, split the difference. Or even shade it down. You still come up with a stock with substantial upside after you do the arithmetic.

What's really ailing the stock? I think it's the fact that being in for 100 points -- instead of maybe 300 points -- just isn't all that exciting, and maybe not worth using all of that capital to get.

Put it this way: When American StandardASD can rally 15% in a couple of weeks on just a couple good pieces of news, who needs to wait around a year for Google to travel $100? Lots of capital used; not a great use of it, now that the pop is gone.

Do I still want to own Google? I would think so. But the stock is now only as attractive as a lot of other stocks, and that, in the end, is what is keeping it down. The competition's getting keener, and Google didn't get better enough.