Google stock remained relatively flat during yesterday’s session, closing at $562.45 (17.9x 2010 EPS and 15.7x Enterprise Value / EBITDA). Upcoming catalysts include March quarter earnings (likely the third week in April); updates on changes to paid search results; Android adoption; and benchmarks surrounding newer initiatives (Wave, Chrome, Base, broadband network, etc.).
UBS Increases Estimates On CPC Growth
UBS analyst Brian Pitz increased his Google estimates this morning due, in part, to channel checks that suggest CPC (cost per click) rates have increased materially over Q409. He believes the GOOG shares already price in China’s worst case scenario and reiterates his $700 price target (25% upside) and Buy rating.
The Great Firewall Rises Again; Google Blocked In China (The Wall Street Journal)
China appears to be quite upset with Google. All searches were blocked on the re-routed Hong Kong site starting late Tuesday afternoon (early Tuesday morning US time). Mobile searches have been blocked as well. If the censorship continues, it would stifle Google’s Hong Kong operations and hopes of retaining some services there (like Gmail, Google Maps, etc.). While it only accounts for 1 – 2% of total revenue, China has more Internet users than the total U.S. population.
Google Will Eventually Control The Smartphone Market (The Street)
David MacDougall at The Street believes that Google, not Apple, will ultimately own the smartphone market. According to a third party research firm, the iPhone OS is about 10 million units behind market leaders Nokia and Research In Motion. Android’s non-device specific platform enables Google to operate across devices and manufacturers. Unlike the iPhone OS which operates only on Apple products.
Google Applications Showing Strength In The Enterprise (eWeek)
A survey conducted by Palo Alto Networks indicated that more businesses have been using Google Applications recently. Among the top performing offerings, “Google Analytics was used in 95% of the companies surveyed, followed closely by Gmail at 92%” and other applications followed suit. Henry Blodget at Business Insider believes that while Google Apps is still a tiny business for Google ($50 million per year), Microsoft should be in major panic mode because of the rise in the disruptive technology.
Google Is Big, But Still A Small Player In Washington (CNN)
Google ranks amongst the biggest tech lobbyists in Washington (behind Microsoft, IBM and Oracle). The company is most active on issues like clean energy, radio spectrum, “net neutrality” (Google’s broadband initiative) as well as free speech (timely as it wages war against China). That said, according to Art Brodsky, communications director at Public Knowledge, the companies that Google lobbies against “have been around for 100 years. People think of Google as a big colossus, and it is, but in Washington, they’re really not yet.” That may be true but it didn’t stop Congress from praising Google for it’s actions in China.
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