Play the Google $200 Billion Market Cap Game!


Google is closing in on a $200 billion market cap.  This means:

  • Google is now worth more than Time Warner, Disney, and News Corp. combined (MediaPost).
  • Google is now worth 3.6 times as much as the public ad agencies combined: WPP ($17.72 billion), Omnicom ($16.43 billion), Publicis ($8.57 billion), Interpublic ($4.89 billion), Aegis ($2.96 billion), Havas ($2.484 billion), and MDC Partners ($274 million) (MediaPost).
  • Google is now worth 2/3 of Microsoft.
  • Google is trading at approximately 60x run-rate cash flow ($3 billion-ish).

Now, forget the current market caps for a minute.  Pretend you are playing a board game called World Business Domination.  Pretend the goal is to end up with “the most.”  Pretend players can freely trade with one another and the player that owns Google has just offered to trade it to you for one of the following combination of assets:

  • Time Warner, News Corp, and Disney
  • 2/3 of your Microsoft stake
  • All the public ad agencies, plus $150 billion in cash
  • $200 billion in cash

Would you take one of these deals?  Which one? 

I personally would take either of the first two.  I would not, however, take the cash trades.  I would rather have $200 billion in cash (and, more importantly, the $200 billion worth of other assets I could buy with that cash) than Google.  Even if I desperately wanted to own Google, I would bet that I could pick it up later for less–or that the diversified collection of $200 billion of assets I bought (though not Time Warner, Dis, et al) would end up being worth more than Google.  One of the assets that I would buy, by the way, would be Yahoo. And then I’d still have $160 billion left over.

And you?  We hereby invite SAI readers to play THE GOOGLE $2OO BILLION MARKET CAP GAME! Tell us how you would play the move above–and, importantly, if you took the cash, what you would buy with it.  We’ll vote on the most persuasive answer, pick a winner, and post your name and strategy here.  And then we’ll check back in 25 years and see who really won…

See Also:
Google to $2,000?
The Other Side of Google $2000–a 6% Annual Return