International Periscope

Nearly six years after the first dot-com bubble burst, the lesson is clear: "Nobody ever learns anything," says Tim Price, chief investment officer for brokerage Ansbacher & Co. in London. After beating estimates for many quarters--and hitting a high of $475 on Jan. 11--Google reported disappointing earnings on Jan. 31, which knocked some $40 billion off its market value. Then came last week's cover story in the financial weekly Barron's, which simply tallied up all the threats against Google and warned that if 2006 profits were 30 percent lower than expected, the share price could be cut in half. Suddenly noting the rise of competition from Yahoo! and Microsoft, as well as the threat of "click fraud" to its advertising franchise, investors again dumped the shares, closing the week at $369, 22 percent off the peak.

What investors seemed to forget was that there is nothing new about stock-market valuations--they should reflect the present-day value of expected future earnings. Yet it is very hard to evaluate a company that is growing so fast and testing the waters for such a broad range of new ventures. "No sensible metric works," says Price. As investment adviser Motley Fool noted this week, "the next big thing is always overpriced."

Is Google still overvalued? There are plenty of bulls out there, with share-price forecasts as high as $600. The lone analyst who has kept a "sell" recommendation since last year is Philip Remek of Guzman & Co. He's based in Miami, far from the lemming-like pressures of Wall Street.

--Karen Lowry Miller Washington: E-Mail Aftermath Six months after Hurricane Katrina ravaged New Orleans, there still isn't a clear account of what federal officials were doing in the hours and days after the levees crumbled and the misery set in. But last week FEMA Director Michael Brown, now trying to revive his image, gave Congress a selection of his e-mails as the catastrophe unfolded. The e-mails, obtained by NEWSWEEK, provide a picture of officials' conversations amid the chaos. At around 10 p.m. on Monday, Aug. 29, the night Katrina swamped New Orleans, Brown replied to an earlier e-mail from White House chief of staff Andy Card: "Thanks for writing, Andy. This is a bad one. Housing, transportation and environment could be long term issues."

Four days later, however, Brown and other officials seemed more preoccupied with office politics than disaster relief; one e-mail from a Brown aide advised him to talk up his boss, Homeland Security Director Michael Chertoff, in his press conferences. Last week Brown told NEWSWEEK that he was frustrated because Chertoff tried to micromanage the disaster. "I couldn't do my job," he said. (Neither Chertoff nor the White House responded to requests for comment.) By the time he exchanged e-mails with Bush aide Clay Johnson III on Sept. 6, Brown said he was ready to "walk off" the job.

--Mark Hosenball TAIWAN Tacking Toward the Center May Be a Mistake Taiwanese opposition leader and likely 2008 presidential candidate Ma Ying-jeou wowed crowds in Europe last week. But back home, the Kuomintang party chairman's message on cross-strait relations was regarded with skepticism from all sides. In a nutshell, Ma indicated that the KMT might back eventual unification with China, but only after China democratizes and its economy is "congruent" with Taiwan's. And even then, the party would first seek the consent of the Taiwanese people. In other words, don't hold your breath.

By setting such a high bar for unification and emphasizing his support for the cross-strait status quo, says Emile Sheng of Soochow University, the Hong Kong-born Ma is attempting to "vaccinate" himself against charges of being soft on China before the 2008 vote. "He's trying to move toward the center," Sheng says. "It would solve his most obvious weakness two years ahead of time."

However, he may have shot himself in the foot. Ma has exposed himself to attacks from pro-unification Sinophiles in his own camp. The independence-leaning Democratic Progressive Party seized on Ma's latest comments, too, accusing him of waffling. "I think Ma has given the [DPP] quite a cache of ammunition right now," says Chao Chien-min, a professor of political science at National Chengchi University in Taipei. Still, if he's able to take the flak, he could end up right where he wants to be in 2008: on the safe middle ground.

--Jonathan Adams Q and A Taking on Thaksin These days, Thai media mogul Sondhi Limthongkul is the news, thanks to a very public battle with Prime Minister Thaksin Shinawatra. Sondhi wants Thaksin removed for alleged corruption, abuse of power, suppression of the media and unorthodox business deals. Millions of Thais share Sondhi's views, and on Feb. 26, anti-Thaksin forces plan to stage a sit-in at a fairground in central Bangkok until the P.M. resigns. NEWSWEEK's Joe Cochrane spoke with Sondhi:

There's one word Thaksin cannot spell: integrity.

I'm not against capitalism--I don't like monopolistic capitalism. What I'm fighting for is complete transparency in Thailand, and investors outside of Thailand should be happy. How would you invest in a foreign country when there's no bloody transparency?

I [did]. I'm sorry about that. But I'm not the prime minister.

Exactly, and that's why I'm fighting. He keeps telling people illusions. The more Thaksin stays, the more stupid the Thai people are. He has not injected intelligence into the public. I am the wake-up call for Thailand, and Thaksin hates it.

Business: Remaking Martha One year out of the big house, Martha Stewart is finally starting to rebuild her own house of style. Although her stock has gone down by more than half over the past year, there are signs that the worst may be over. This week Martha Stewart Living Omnimedia is expected to post its first quarterly profit in two years--albeit a skimpy $7 million. Advertisers and subscribers are now flooding back, with ad pages in her magazine doubling in the last three months. And she's spinning out reams of new projects, like a Sirius satellite radio show and a new magazine, Blueprint, aimed at young nesters. "The company is at an inflection point," says analyst Robert Routh. "The public has forgiven or forgotten." But even Martha Stewart isn't ready to declare her comeback complete. She tells NEWSWEEK that her business is back to her preconviction days of two years ago, but not yet at the prescandal glory days of 2001. "Maybe our revenues aren't as high," she says, "but we're back in spirit and in business dealings."

Stewart was never one to go soft in the face of adversity, and she says that's what will keep her nascent comeback going. Her sense of humor will certainly help, too. Asked if her latest burst of creativity--selling a new scrapbooking line at craft stores and trying to expand the reach of her housewares, for instance--suggests she's feeling "untethered," Stewart laughs and embellishes the joke. "I still have 12 months of probation to live through," she says. "So there's still a slight little tether there." --Keith Naughton

Mayhem in the Mud On Saturday, rescue workers in the Philippines dug through a sea of mud--10 meters deep in some places--in the remote region of Guinsaugon after a landslide completely smothered a local village. Two days after the tragedy struck, less than 60 people had been rescued out of a population of more than 1,800, leaving little room for optimism as the search continued. "Everything was buried," a survivor told reporters. "All the people are gone."

Imagining the pitch, Hollywood style, is stomach-turning: "OK! Birth of the European Union! Robert Schuman, French foreign minister, endorses a postwar plan for the European Steel and Coal Community. Out of that you get the EU..." The pitchman would surely be escorted out long before he addressed how decades later, EU red tape forces a broken fisherman on England's Suffolk coast to incinerate his boat--and himself.

Congratulations, then, to British playwright Tim Luscombe for getting "The Schuman Plan" staged at London's Hampstead Theatre. The tale of Britain's ambivalent relationship with Europe is not without drama in real life. Since 1997, P.M. Tony Blair has journeyed from really warm to lukewarm on Europe. Recently he gave a remarkably candid appraisal. Referring to the debacle of the EU constitution, Blair said: "Instead of [seeking] bold policy reform and decisive change, we locked ourselves in a room at the top of the tower and debated things no ordinary citizen could understand." Hilary, the Suffolk fisherman's wife in "The Schuman Plan," puts the case succinctly: "I ain't anti-European. I'm just anti us being in it." --Stryker Mcguire

Architecture: A Hotbed Of Cool Spain is hot, at least when it comes to architecture. A new exhibit at New York's Museum of Modern Art, "On-Site: New Architecture in Spain," is showcasing an impressive array of inventive projects by global design stars, as well as several up-and- coming Spaniards. From housing to museums to airports, the best of the designs--no matter how wild looking--somehow connect to the local culture and conditions. In Barcelona, Enric Miralles and Benedetta Tagliabue draped a huge, whimsically colored curvy roof over an old neoclassical market. In Tole-do, the firm Martinez Lapena-Torres carved a dramatic snaking escalator into a walled hillside that rises 30 meters above the city. And the Swiss firm of Herzog & de Meuron has designed a flamenco center in Jerez de la Frontera with a lacelike facade as exuberant as the ruffles on a dancer's skirt. In these designs, new Spain meets the old with stunning results.

How did Spain become such a hotbed of cool buildings? In the last 20 years, nearly $110 billion has been poured into the country by the EU to improve infrastructure, and a climate for cultural tourism has been sparked by such lauded projects as those for the '92 Barcelona Olympics and the Guggenheim Museum in Bilbao. "It's a unique confluence of many factors and opportunities," says MoMA's chief curator of architecture, Terence Riley, "not the least of which is a renewed commitment to civic culture." --Cathleen Mcguigan

Movies: Going for 'Brokeback' Brokeback mountain" is many things. Breathtaking. Tragic. Heart-wrenching. Turns out it's ripe for comedy, too. Now there are Brokeback "mash-ups"--homemade trailer parodies that recast existing movies as tales of forbidden male love. One, "Top Gun 2: Brokeback Squadron," hints at what Tom Cruise and Val Kilmer do belowdecks when not piloting fighter jets. Then there's "Brokeback to the Future," a re-envisioning of Marty McFly and Doc Brown as time-traveling, star-crossed lovers. They're sophomoric takes with high production values, made possible by newly cheap video software.

But not everyone finds the mash-ups funny. America's National Gay and Lesbian Task Force denounced the trailers as homophobic, and distracting from real-world civil-rights issues. Others disagree: "I don't find it offensive; it's actually very inclusive," says Neil Giuliano, president of the Gay and Lesbian Alliance Against Defamation. "When a film or TV show crosses over into a large national discussion, it's going to be fodder for satire, and that's OK." --Nick Summers