Is Google a buy?

Google shares vaulted to over $470 in Jan with the help of news flow from Consumer Electronic Show in Las Vegas. But the stock has dropped over 20% since then and currently trades at around $367. A few new developments rattled investors:
1) Earnings disappointment. Although the explanation about a foreign tax complication may be reasonable, one has to wonder why the CFO of Google did not see the issue coming just a few months ago? Where is the internal planning?
2) Google seems to be playing double standard in different parts of the world. While it stands up to the government privacy intrusion in the US, for which I applaud the company, it caved in to the pressure of Chinese government by providing a censored search for the China market. I perfectly understand that Google has to comply with local laws wherever it does business. But we all hold Google to a much higher standard than that. After all, it is the company itself that boasts "Do No Evil".
3) Google video turned out to be a flop. At a time, Google seemed to do nothing wrong, the video fiasco seems to shed some doubt among investors. Google is not infallible afterall.
4) Microsoft is opening a Ad research center to study how to improve online ad placement. This is in direct competition of Google's AdSense program.
5) Internet Explorer 7.0, which is to be released soon, includes a search toolbox that could direct search traffic to MSN search engine.
6) The phone companies are making noise about charging a fee for web traffic generated from internet companies like Google and Yahoo. Ed Whitacre of SBC (Now at&t) has made these assertions on several occasions.

While all above concerns are well founded, I do not believe they will materially affect Google's business. The Online ad market still has very low penetration rate (less than 5% in the US). The penetration will only go up. Google's AdSense in fact is helping expand the ad market, because it allows small companies that would otherwise not afford to advertise on traditional media to be able to advertise online. In addition, Google's online ads are more targeted and effective. I think the mass media ad business will be rapidly shifted to targeted ads that Google supports. The market is big enough to not only benefit Google, but also Yahoo and probably MSN. Google is so synonymous to search, and even my 7-year old kid knows to google. I don't think a search box in IE will change consumer behavior too much. Unless MSFT continues to play the wicked game it played against Netscape. But those days are over. MSFT has to watch what it does, or the anti trust authority will knock on the door.

I think Google can grow business in north of 50% for at least another two years. The hyper growth will be followed by steady double digit growth in years to come. I don't see the stock being over valued given its growth prospect. It is definitely a BUY here.

Disclaimer: I personally own Google shares.