We examine Google in this report purely as a technology services provider, specifically an application service provider (ASP), rather than as a media company. Some of the questions we address include:

• Like “Xerox” in the 1960’s, Google is a brand that has become a verb. Such a phenomenon can take a company a long way and present a wide array of strategic options. Will Google be able to do enough to solidify its position by the time its exclusive use of the PageRank patents expire in a few years?

• Thanks to its beginnings Google has a multiyear head start on companies such as Microsoft in delivering to the Software as a Service (SaaS) model. Microsoft has certainly woken up to this market and is even trying to accelerate its plans with the acquisition of Yahoo!. How does Google stand up to Microsoft and others as an industry player?

• Google makes technology-services-centric corporate decisions that are more strategic than any decisions it makes related to media/advertising. Google has said consistently that advertising is simply an enabler, one of many means it could have selected to monetize the value of its application functionality. What are they likely to do in the future?

From a stock standpoint we peg fair value for Google at $800/share. A snapshot of our long-term valuation model is include and available for clients to adjust as they see fit.