The New York Times ran a story in its Sunday business section that reinforces the point I’ve been making about the massive valuation discrepancy between Amazon (AMZN) and Google (GOOG). In a story called The Human Touch That May Loosen Google’s Grip, Randoll Stross, a professor of business at San Jose State University, points out:

Profit margins in the search business are mind-boggling, and cannot be obtained in other segments of the technology world. Google’s net profit margin last year was 29 percent. Amazon’s was 1.8 percent — yes, that is a “1” followed by a decimal point. Which business would you rather be in?

Even the biggest AMZN bulls would be hard-pressed to justify the stock’s valuation relative to GOOG.  AMZN is trading at a 134% premium to GOOG when comparing the 2008 average PE-to-growth ratios of the two stocks (and a still hefty 77% premium when using the top estimates of both stocks).