It looks like Henry Blodget may be up to his old tricks again. Yesterday Blodget predicted that Google could hit $2,000 a share. Is this realistic or is it the Dow 36,000 thesis of the Web 2.0 era?Now, to be fair, Blodget is not the first person to suggest that Google could hit $2,000 a share. But yesterday's blog post is the one of the most enthusiastic endorsements of this idea I have seen:

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Remember a couple years back when some analyst floated the idea that Google could eventually be worth $2,000 a share -- and was ridiculed from coast to coast? Well, first it's worth noting that Google is now almost a third of the way there. Second, it's worth noting that $2,000 a share would mean a market cap of about $750 billion, which -- given a reasonable time horizon -- just isn't that far-fetched.

Why? First, from a macro level, in every technology wave the market leader usually ends up amassing more power, wealth, and market capitalization than the leaders in the prior wave, often by a startling magnitude. The leaders in the last technology wave included Microsoft and Cisco, both of which peaked around $500 billion in market capitalization.

Even a room full of bears would no doubt agree that there will eventually be a company that has at least a $1 trillion market capitalization. So name one company that is better positioned than Google to one day have a $1 trillion market capitalization.

Blodget's argument largely assumes that Google's success will continue to compound at the same rate it has enjoyed to date. Now, on one level that assumption looks safe, especially given Google's current market cap of $182 billion. But it ignores the fact that all companies, no matter how powerful they are at their apex, stop growing at their peak rates.

Similar predictions about Microsoft looked attractive in the mid-1990s. Today they look facile.

I also think Google's business is more fragile than many want to believe. Despite spending heavily on a bevy of new initiatives, Google is still an advertising company that uses its search engine to drive its revenue. I addressed this point in August:

First, I'm not convinced that Google's other, nonsearch product offerings are as successful as the company's advocates (including Miller) would like us to believe. As I pointed out earlier today, Google dropped its paid video service. Google has been far from successful in China, where it has lost market share to Baidu, which is the dominant search engine in that market. No one can tell me how successful Google's mobile initiatives are to date, despite all the hype surrounding the Google Phone. Anyone remember Google Answers? I think you see my point.

Sure, Google has enjoyed a lot of success with some nonsearch services, like Gmail. I'm not going to argue that it hasn't. But, I'm trying to demonstrate that Google is vulnerable and that it is far from perfect. To date, Google's biggest successes remain its search engine and the massive ad machine that sits on top of it. Would anyone seriously argue that Google's business would survive if its search engine were to collapse tomorrow? I don't think so.

I think Google is vulnerable to a number of smaller competitors, as well as the open source search movement.

On top of this, I also think that the mortgage crisis will affect all markets -- even the online ad market. Google could soon be in for a correction just as big as the one rattling through the U.S. real estate market. If that happens and online ad spending growth slows, I don't see Google's growth continuing at its current pace.

What do you think? Will Google hit $2,000 a share? Or is Blodget back to his old tricks?