Today I’m thrilled to open a trade that I could easily do on a much longer time horizon. I don’t think you could possibly compare these 2 stocks. Just take a look at their recent growth profiles:

DMD Revenue Quarterly YoY Growth data by YCharts

You can also take a look at the numbers for both stocks:

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Long Google (GOOG)

I’m increasingly convinced that Google’s “cloud advantage” will turn out to be a major factor in how the next few years play out. Google is able to build off of its products, information to produce vastly superior products. That and strong leadership by Larry Page have been key factors in Google being to able maintain strong growth and I do expect that to continue. I do think Google is attractive at these prices, especially when you compare it to a company such as Demand Media.

Next earnings release: July 19 2013

Short Demand Media (DMD)

I struggle to believe in Demand Media as a sustainable company. Its business is building websites that provide useful information about just about anything you can think of (just take a look at eHow.com). Yes, those are solid websites but it’s also a model that is extremely competitive, that depends on advertising and that depends on Google for its traffic. Not a great place to be in my opinion. So seeing this company which has little to no long term edge over competitors such as Yahoo (YHOO) and AOL (AOL) trading at a comparable P/E to Google’s makes no sense to me.

Next earnings release: Aug 7 2013

Disclaimer: No current position on Google (GOOG) or Demand Media (DMD) but I will be opening this trade Monday morning