Where Google's Going

This column was originally published on RealMoney on Nov. 21 at 12:54 p.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

When will people understand that it is, in the end, the P/E -- the price of the stock divided by the earnings -- that controls?

I have been inundated with questions about where Google (GOOG Quote) can go, as if it's a plane that is breaking the sound barrier and people want to know if it can possibly get to Mach 5. You have to figure out what Google is worth based on what it will earn and what people will pay for it.

I don't understand why Google doesn't command the highest multiple in the market, something like 55 times, but the absurdity of saying $825 to those who don't understand this kind of analysis causes immense problems. ...