Just last week, Google (NASDAQ: GOOG) dropped more than 7% in one day after a report showed paid click search rates were down from a year ago. So this granddaddy of growth stocks is now trading close to $450 – about 40% off its all-time high near $750 last November. Is this a screaming buy in a company that changes the way the game is played? Or is it the end of the road for this former flyer?

That's a question I'm getting a lot these days. I've spent my entire professional life profiting from growth companies, even helping several of them go public, and the company I get asked about most is Google.

What would you pay for Google? $500 a share? Maybe $525 or $550? Or is the stock is already too rich or too damaged for your blood?

Let me clue you in on a little secret. Actually, it's not much of a secret. It's just that you're not hearing about this anywhere. Someone you and I both know values GOOG at $1,350 per share. That would be a triple from current prices!

Bill Gates, the richest man in the world and founder of Microsoft, is no dummy. So we would be fools not to pay attention when we find out he apparently believes Google is worth $1,350 a share. This is something you’re not hearing about anywhere else, so let me take a moment to give you the full story:

It all starts with Microsoft’s decision to acquire Yahoo, which I'm sure you’ve heard about. Microsoft is offering $31 a share, or a tidy $45 billion. First, a little context. Microsoft has competed against both Yahoo and Google for 10 years now, and is losing–badly. The MSN search engine is stuck in the mud with about 4% of the market, while Yahoo is a little better at 15%. Google is killing everybody with a 76% share!

As you can see, to be a serious player in this industry, Microsoft has no choice but to go after Yahoo, which also stands no chance on its own. The company has posted five consecutive quarters of declining profitability and market share, and the management team carries a “B” rating at best–far short of what we look for in a true GameChanger.

So what does this have to do with Bill Gates’ valuing Google at $1,350 per share? Join me for a moment on a short trip into the world of company valuation.

Having spent 16 years in the investment banking world, I can’t tell you how many thousands of times I have heard the expression, “Tell me the comps.” It’s the first question any decent banker will ask in a discussion about a potential merger, an acquisition or when bringing a company public. It means, “What are the comparable companies in a particular sector worth or trading at in the marketplace?”

It’s no different from when you buy a home. The first thing you do is find out what other homes in the neighborhood sold for. You get a read on the market to help you determine an acceptable price range and eventually make a reasonable offer.

It’s the same thing when valuing companies, so let’s continue with our analysis. Microsoft is offering $31 a share for Yahoo, and Wall Street’s consensus 2008 earnings estimate for Yahoo is $0.46 per share. Calculating a price-to-earnings ratio on those numbers, you can see Microsoft is offering to pay 67 times, those projected earnings.

If one applies the same formula to Google, here is what you get: Wall Street’s consensus for 2008 earnings is $20.15 per share. Multiply that by 67 times and the price tag is a whopping $1,350 per share!

Will We Get a New GameChanger?

Here’s the fun part for the bankers advising Yahoo: They know this, and they also know there are no other viable companies out there that help Microsoft compete with Google, so you can bet they will try to “hold ’em up” for more money. Investment bankers quietly call this the “arrogance factor,” and I’ve seen it many times before.

We’re already seeing it in this case, and it will continue to be played to the ultimate. The Yahoo board has rejected Microsoft’s offer, and there were reports just recently that Microsoft will take the fight right to the shareholders in what Wall Street affectionately calls a “proxy fight." Yes, the soap opera known as Microsoft/Yahoo is just getting started. I’m no soap fan, but I have to admit, it will be fun to watch the intrigue unfold here.

If you own Yahoo stock, be prepared to vote, because it will come down eventually to a shareholders vote. Take my advice and vote “yes” and pocket your $31 a share (or whatever the final price is).

Why? Because even if the transaction eventually does go through, it is neither a GameChanger nor a GameChanging event.

In GameChangers, I help my readers build their wealth by investing in truly revolutionary companies. I'm talking about companies that solve a problem, redefine the boundaries, recalibrate the score, upset the applecart–and make fortunes for smart investors.

Any new Microsoft/Yahoo corporation will not fit the bill. First, they won't emerge with a viable and realistic game plan for about 18 months. Even more importantly, the Yahoo talent pool will have been depleted by then as the bright and creative employees dust off their resumes and move on to a company that values creativity.

A company, frankly, like Google. One of the hallmarks of a GameChanger is that employees want to work there, and Google has a standing spot at the top of the list of "Best Companies to Work for in America." Heck, who wouldn’t like free lunch and dinner, onsite laundry facilities, gyms, and even lava lamps?

No, this game is over. Google is the winner for as far into the future as the eye can see, and any Microsoft/Yahoo deal won’t change that. By the time a deal is done, Google will be even further ahead. Google is also playing this just right by throwing mud into the fight as they offer to “partner up” with Yahoo and help them remain independent. It’s a smoke screen! Google wants to see Microsoft pay up even more for Yahoo.

Google is the real GameChanger here, so I repeat my earlier question to you: What would you pay for Google?

Georges Yared was one of the first analysts to identify game-changing stocks like Google, Harley-Davidson, Starbucks, Broadvision and more. The list is longer than this, but you get the idea: big, big winners—400% to 7,000% profits—in companies that changed the game and grabbed huge, sustainable competitive advantages. Click here to learn how you can become a GameChanger now and get immediate access to Georges' brand new report, 6 Stocks Leading the You Revolution, which includes his very latest advice on Google. Take advantage of this special offer now!