I’m not enough of a student of economic value added, or EVA, analysis that Geoff deploys in his piece to judge how conclusive his argument is. I’m also not sure how closely professional managers follow this method. I’d love to know confessed-Google-lover Bill Miller’s thoughts on the subject. Actually, I’m not really commenting one way or the other on the valuation. Not now, anyway. All great companies fetch a premium that defies any rational analysis — until they don’t. Witness Microsoft (MSFT), whose stock grew until 2001 and hasn’t since, and General Electric (GE), which, as the one and only Nelson Schwartz reminded us this past weekend, still hasn’t recovered its 2000 high. (Actually, Geoff Colvin wrote that story too, in 2005. But now I really digress.) In essence, Google’s valuation will remain tied more to its ability to grow than its return on capital. That’s my opinion, for what it’s worth.

Which leads to my second thought, regarding a line near the end of Geoff’s column that journalists often refer to as the “to be sure” line, as in “To be sure, Mr. Smith accomplished much in his career …” Geoff writes:

Irrational valuations can last a long time, and sometimes they correct gently rather than violently. And it doesn’t mean that Google is poorly run. On the contrary, it has been brilliantly run. (emphasis added.)

That’s a fascinating point, because here in Silicon Valley there’s absolutely no consensus that Google has been brilliantly run. There’s no question that Google has brilliantly exploited a massive opportunity in the online advertising market, primarily search-based text ads. No one can ever deny that.

Whether the company is well run, however, simply can’t be known yet. As I pointed out in my own cover story last year, Google so far has been able to avoid answering the question of whether its chaotic nature is by design or whether it’s merely holding onto the handles of one incredibly fast roller-coaster ride. Its young founders are universally believed to be really bright guys. But they’ve never worked anywhere else. They condone, nay, encourage, a permissive culture that lets engineers run wild whether or not they are contributing to the bottom line. Its CEO, Eric Schmidt, was a top scientist at Sun Microsystems (SUNW) and then an uneventful CEO of a relatively unimportant Novell (NOVL). The line on Schmidt is that he has grown tremendously in the job at Google. That’s undoubtedly true. Still, he hasn’t been tested by the kind of adversity that knocks CEOs on their backs. And to judge by one data point, Google’s surprising inability to manage its hiring costs, Schmidt hardly has the place running like a finely-tuned engine.

To be sure, Google already is a company for the ages. Its stock may surge even more. The greatness of its management, however, will be judged far more in the next three years than in the last three since it went public.