Be kinde to folk. This changeth the whole habitat.
- Manlobbi
Personal Finance Topics / Macroeconomic Trends and Risks
No. of Recommendations: 0
Can anyone tell me why Google is a great Buffett buy at $290 when 'search' is almost destroyed as a business model, and business costs are accelerating?
Considering it was not worthy of attention when it was at $80, only 1000 days ago...
TRS
No. of Recommendations: 3
Can anyone tell me why Google is a great Buffett buy at $290 when 'search' is almost destroyed as a business model, and business costs are accelerating?
Considering it was not worthy of attention when it was at $80, only 1000 days ago...Suggest you come over to the GOOG board, lots of discussion there.
https://www.shrewdm.com/MB?bid=9tecmo
...
No. of Recommendations: 14
Considering Google to be a search engine is like considering Amazon a retailer. Ninety-nine percent of the people you ask on the street would choose those as the most valuable asset of the company.
Back during the early 1980's I stumbled across AutoCAD (a computer aided design software package, Autodesk's main application, which is now the industry standard for architects and some engineering disciplines. I immediately recognized its potential (owning both an electrical engineering/contracting firm and a personal computer oriented reseller). Well, we had a single-digit reseller number and became the first Autodesk reseller in Manhattan. AutoCAD, and the hardware systems that wrapped around it, quickly became a significant portion of our business - and the firm was very obviously associated with it in the technical fields, which used it.
Our relationship with Autodesk flourished for about two decades, but during that time the rest of the firm grew large enough that, when we parted ways (due to Autodesk's insistence that their resellers give up their other business "distractions" and concentrate solely on selling/supporting their software), my pain was mostly psychological - as the loss of their business didn't ripple the water much from the standpoint of the overall business.
Google's wealth is the immense amount of data collected by years of owning the default search engine, one of the major browser owners, the default non-Apple mobile phone operating system and so on. They are a major player in AI, autonomous vehicles and a vast array of other nerdy stuff.
Incidentally, while I use a number of AI's (mainly for research purposes), Google's is one of them - and does pretty well for my usual needs.
While it would, no doubt, hurt Google if their search engine lost relevance more than my loss of a vendor relationship, I suspect, rather than have it lose relevance, they will try to keep pace with their competitors.
Jeff
No. of Recommendations: 23
"Can anyone tell me why Google is a great Buffett buy at $290 when 'search' is almost destroyed as a business model, and business costs are accelerating?
One potential reason for Buffett being "late" on his GOOGL investment...
Buffett has always been one to avoid even the slightest appearances of conflict of interest.
Ron Olson was on Berkshire's board until his "retirement" from that position at the May 2025 meeting.
Ron Olson had been a director of Alphabet Inc. (Google’s parent) since its inception as Google in 2004 (and remained on the board until his retirement in 2024).
Ron Olson also served as a longtime outside attorney for Larry Page and Sergey Brin, the founders of Google (now Alphabet Inc.).
He and his law firm, Munger, Tolles & Olson, have represented Larry Page, Sergey Brin, and Google/Alphabet in numerous high-profile matters for over two decades, including:
1) The company’s 2004 IPO
2) The creation and defense of the dual-class share structure that preserved founder control
3) Various antitrust, privacy, and shareholder litigation
4) Personal legal matters for Page and Brin
Buffett had occasionally joked at Berkshire meetings that “Ron Olson works for me on Saturdays and for Google the rest of the week,” highlighting Olson’s dual roles with Berkshire Hathaway and the Google founders.
Maybe Mr. Buffett felt he had to wait until Olson stepped down from the board to avoid any appearances of impropriety?
No. of Recommendations: 7
"Maybe Mr. Buffett felt he had to wait until Olson stepped down from the board to avoid any appearances of impropriety?If so, Warren made the more ethical choice - to take a "pass" on GOOGL even when faced with the potential to make a "no brainer" multi billion dollar gain for the company.
Speaks volumes to his character.
Buffett in a 2010 letter to Berkshire Hathaway Managers:
"The priority is that all of us continue to zealously guard Berkshire’s reputation. We can’t be
perfect but we can try to be. As I’ve said in these memos for more than 25 years: “We can afford to lose
money – even a lot of money. But we can’t afford to lose reputation – even a shred of reputation.” We
must continue to measure every act against not only what is legal but also what we would be happy to have
written about on the front page of a national newspaper in an article written by an unfriendly but intelligent
reporter."https://www.berkshirehathaway.com/2010ar/2010ar.pd...
No. of Recommendations: 9
One potential reason for Buffett being "late" on his GOOGL investment...
Ron Olson was on Berkshire's board until his "retirement" from that position at the May 2025 meeting.
Good point. Certainly one of the more plausible answers to the question of "why now", as opposed to any year in the past, no matter which money manager placed the order.
Jim
No. of Recommendations: 6
In two separate cases, the US Department of Justice found that Google had illegally maintained monopolies in the online search engine market and in digital ads. Remedies could have included being forced to sell or split off Chrome, Android, or possibly portions of its ad business. This was settled in September, when the judge found that only minor remedies were needed (presumably Google will appeal, but it won't get any worse). In part, somewhat incredibly to me, the judge reached this conclusion because the emergence of AI is disrupting the market.
One thing we know about Buffett is that he hates uncertainty. It tracks that he would wait until after the lawsuits were settled before pulling the pin.
In the meantime, Google's business model basically boils down to improving search, which improves ad placement, which improves ad rates. Last summer, Sundar said that AI is improving ad click throughs. So maybe AI will help them come out a winner. Google almost fumbled this whole thing. Google invented the generative pre-trained transformer, but they weren't first to market. And from my own subjective experience, I'd say ChatGPT still beats Gemini. But they refocused quickly and are now all in. I don't know how this plays out, but I'd say it is likely Google will be one of the AI winners.
No. of Recommendations: 5
One thing we know about Buffett is that he hates uncertainty. It tracks that he would wait until after the lawsuits were settled before pulling the pin.
Except he didn't. The lawsuit was settled September 2nd, and Berkshire purchased Google August 8th. This according to information BreckHutHigh found:
A recent Q3 NAIC filing for National Indemnity (page E04) reveals that on 8/8/25 they purchased 11,284,606 shares of Alphabet Class A shares for $2,176,508,440, or $192.87/share.
No. of Recommendations: 16
Except he didn't. The lawsuit was settled September 2nd, and Berkshire purchased Google August 8th. This according to information BreckHutHigh found:
Other than being wrong, it was a great theory.
No. of Recommendations: 4
Barron's:
Warren Buffett Knew Google Was a Smart Investment. Berkshire Waited 8 Years to Buy.
https://www.barrons.com/articles/warren-buffett-be...Waited 8 years and bought a lemonade-stand amount... :-)
Berkshire, Munger pointed, had missed out on a smart stock buy before.
“We blew Walmart, too,” Munger said. “It was a total cinch. We were smart enough to figure that out and didn’t. Our worst mistakes have been mistakes of omission.”
No. of Recommendations: 6
Warren talked about missing Google multiple times. If he had only bought it on each of those utterances.
No. of Recommendations: 18
At 71.5 years old two things I can tell you:
1) I am not nearly as "on it" or as "aware" as earlier in life. Warren was leaps and bounds FAR better than me at 71.5 but that was a long time ago and he aged to being not nearly as aware as in the past.
2) For about 30 years now I have reminded investors that if you choose to own Berkshire then you might best not sit around and expect this company to be your investment guru, that it is you not just them that can choose to buy stocks (like Google).
Me, my brother, my sister, and my step-mom each inherited a whopping 25 shares of Berk from dad who died Jan 10th, 1970. All of us kept 4 digit inheritance and not one of us ever berated management for not buying what we could buy ourselves, to me a very silly perspective.
I have owned Google for many-many years. I never expected Berk to buy Google, never once thought about it.
No. of Recommendations: 3
Correction: We inherited Jan 10th 1975.
No. of Recommendations: 10
Great fortune and what discipline to “hold the damn stock” for 50 years and watch it compound and rise from $50 to $752K/ share and resisting the temptation to buy a car or moped or something when you were in college!
Were you just wired to buy & hold back then or had that been drilled into you by your Dad and family investors? So cool and amazing everyone held onto all the Berkshire shares. Did you for the most part keep all the other inherited shares as well?!
Sorry you all lost your Dad at such an early age.
